… the most peculiar and most human of all expressions." - according to Charles Darwin.

Blushing is the temporary reddening of a person's face due to (apparently specialised) blood vessel dilation mechanisms. It is normally involuntary and triggered by emotional factors, such as those associated with embarrassment, anger, or romantic stimulation etc..

It has been suggested that blushing and flushing could be visible manifestations of a physiological rebound of the basic instinctual fight/flight mechanism, when physical action is not possible.

Another idea is that blushing could serve as a social 'face-saving' mechanism :

[…] experiments supported the hypothesis that blushing has remedial properties. In most instances, blushing actors were evaluated more favorably than their nonblushing counterparts. Although people often consider blushing to be an undesirable response, our results showed that, in the context of transgressions and mishaps, blushing is a helpful bodily signal with face-saving properties."

Source : Emotion, 9(2), 287–291

However, no exact mechanism or evolutionary advantage has so far been agreed.

More info : wikipedia