The largest known star is VY Canis Majoris, a red hypergiant measuring between 1800 to 2100 solar radii. Its volume is almost a billion times that of the Sun, though its density is much less. Canis Majoris means big dog in Latin. If it were located in the solar system, its surface would reach all the way out to the orbit of Saturn. Another way of saying this is that this star is about 9 astronomical units (AUs) wide, nine times the distance between the Earth and the Sun. There must be larger stars located in other galaxies, but we presently lack telescopes powerful enough to resolve them. Hypertelescopes may help in this regard.
VY Canis Majoris is a star in its final death throes. It is ejecting massive amounts of material into a surrounding nebula that makes the star blocked in the visible spectrum. It must be observed in the infrared portion of the spectrum. The star's death nebula is ~4500 AU in width, about fifty times larger than the star itself and much larger than our solar system. Within the gas nebula is a smaller circumstellar dust region, which has a temperature of 760 K, and a width of approximately 260 AU. The star surface probably has a temperature around 3650 K, extremely cold for a star.
Unlike main sequence stars such as our Sun, VY Canis Majoris has no distinct photosphere and thus just trails off into space. Although it is the biggest known star, it is definitely not the most massive, partly because it has already ejected so much of its mass into the surrounding nebula.
Like all red giants and hypergiants, VY Canis Majoris is so big because it has exhausted all the hydrogen fuel in its core, and has begun fusing hydrogen on a shell outside of a helium core. In fact, VY Canis Majoris is so big that it can fuse together helium, lithium, and so on, all the way up the periodic table to iron and beyond. Eventually it will have a core made mainly of iron, just like the planets. The problem with post-iron fusion reactions is that they produce no energy, and hence cannot balance out the gravitational pressure generated by the star. When all the fusion fuel runs out, the star will collapse catastrophically in a supernova explosion and become a black hole.