Butterfat or milkfat is the fatty portion of milk. Milk and cream are often sold according to the amount of butterfat they contain.
In fresh milk, butterfat takes the form of small globules of fat that can be seen under magnification. If the milk is allowed to stand, the fat slowly rises to the top. Historically, people would let milk stand after milking and then skim it to remove the fat for churning into butter and cream products. Today, milk is more commonly spun in centrifuges to separate out the fatty components, allowing the milk to be kept in chilled and sterile conditions at all times.
In homogenized milk, the butterfat is broken up so it will not filter out, but instead remains suspended in the fluids of the milk, in a solution known as a colloid. This is done with milk and cream to prevent the butterfat from separating, although it is sometimes possible to purchase specialty products that have not been homogenized and will separate if allowed to stand.
Source: Wikipedia, https://en.wikipedia.org/wiki/Butterfat