Page Rank (PR) is a bit of a secret Google keep to themselves, they issue the new Page Rank approximately every 2-3 months.
The PR is determined by how important they see your site in relation to other sites it links to, this is called back links from other site.
If your site is linked to sites with a high PR, your site ranks higher as its perceived as being important.
A great article I found on the topic is listed below, it helped me understand it a lot more and taught me to focus on backlink form high ranking PR sites that are in my niche.
Check Your Backlinks: