Jews throughout Nazi-occupied Europe were forced to wear a badge in the form of a Yellow Star as a means of identification. This was not a new idea; since medieval times many other societies had forced their Jewish citizens to wear badges to identify themselves.

The badges were often printed on coarse yellow cloth and were a garish yellow colour. The star, which represented the star of David, was outlined in thick, black lines and the word 'Jew' was printed in mock-Hebraic type. In the Warsaw ghetto, Jews wore a white armband with a blue Star of David on their left arm. In some ghettos, even babies in prams had to wear the armbands or stars. Jewish shops were also marked with a Yellow Star.

The star was intended to humiliate Jews and to mark them out for segregation and discrimination. The policy also made it easier to identify Jews for deportation to camps.

Source: http://www.bl.uk/learning/histcitizen/voices/info/yellowstar/theyellowstar.html