It wasnarrated that Abu Sa'eed Al-Khudri said:
"We said: 'O Messengerof Allah! We know what it means to send greetings upon you, but whatdoes it mean to send peace and blessings upon you?' He said: 'Say:"Allahumma salli 'ala Muhammadin 'abdika wa Rasulika kamasalayta 'ala Ibrahima, wa barik 'ala Muhammad (wa 'ala aliMuhammadin) kama barakta 'ala Ibrahima [O Allah, send Your grace,honor and mercy upon Muhammad, Your slave and Messenger, as You sentYour (grace, honour and mercy) upon Ibrahim, and send Your blessingsupon Muhammad (and the family of Muhammad) as You sent Your blessingsupon Ibrahim]."
English reference: Vol. 1, Book 5, Hadith 903
Arabic reference: Book 5, Hadith 956