The initials stand for Uniform Tire Quality Grading, a quality rating system developed by the Department of Transportation (DOT). The system was designed to provide information to consumers as to the relative performance of passenger tires in the areas of treadwear, traction and temperature.

A UTQG Rating Looks Like This: 150 A B
The number 150 indicates treadwear rating; the first letter (A) indicates traction, and the second letter (B) indicates temperature.

TREADWEAR
The treadwear grade is a comparative rating based on the wear rate of the tire when tested under controlled conditions on a specified government test course. For example, a tire graded 150 would wear one and a half (1 1/2) times as well on the government course as a tire graded 100. the relative performance of tires depends upon the actual conditions of their use, however, and may depart significantly from the norm due to variations in driving habits, service practices and differences in road characteristics.

TRACTION A, B, C
The traction grades from highest to lowest, are A, B, and C, and they represent the tire's ability to stop on wet pavement as measured under controlled conditions on specified government test surfaces of asphalt and concrete. A tire marked C may have poor traction performance.
WARNING: The traction grade assigned is based on braking (straight ahead) traction test and does not include cornering (turning) traction.

TEMPERATURE AA, A, B, C
The temperature grades are AA (the highest), A, B, and C, representing the tire's resistance to the generation of heat and its ability to dissipate heat when tested under controlled conditions on a specified indoor laboratory test wheel. Sustained high temperature can cause the material of the tire to degenerate and reduce tire life, and excesive temperature can lead to sudden tire failure. The grade C corresponds to a level of performance which all passenger car tires must meet under the Federal Motor Vehicle Safety Standard No. 109. Grades AA, A and B represent higher levels of performance on the laboratory test wheel than the minimum required by law.
WARNING: The temperature grade is established for a tire that is properly inflated and not overloaded. Excessive speed, under inflation, or excessive loading, either separately or in combination, can cause heat buildup and possible tire failure.

You should be aware that each tire manufacturer assigns its own rating to their tires. That is why UTQG ratings are more valuable when used to compare how a manufacturer's tires rate within its own product line rather than as a comparison between brands. UTQG is just one tool to use when selecting tires and it should not be your only guide.