According to wikipedia,

H0 scale (H + number zero), often also written HO scale (H + capital letter O), is the most popular scale of model railway in most of the world (outside the United Kingdom, where the slightly larger 00 gauge is more common). The name is derived from the fact that its 1:87 scale is approximately half that of 0 (zero) scale, hence H0. 0 scale in turn was named following the older and larger 1, 2, and 3 scales. The term H0 is pronounced ("aitch-oh"), not "ho" nor "aitch-zero".

In H0 scale, 3.5 millimetres represents 1 real foot; this ratio works out to about 1:87.086. In H0, rails are usually spaced 16.5 millimeters apart which models the standard railroad gauge of 4' 8.5" or 1435 mm.