tModLoader is essentially a mod for Terraria that provides a way to load your own mods without having to work directly with Terraria's source code itself. This means you can easily make mods that are compatible with other people's mods and save yourself the trouble of having to decompile then recompile Terraria.exe. It is made to work for Terraria 1.3.
tModLoader saves worlds and players separately from vanilla worlds and players. Due to specific differences in save file formats, vanilla worlds and players can be ported to tModLoader worlds and players simply by copying over save files, but tModLoader worlds and players cannot be ported back to vanilla worlds and players. (Currently worlds that do not contain modded items can be ported back, but this will change in the future.)
My goal for tModLoader it to make it simple as possible while giving the modder powerful control over the game. It is designed in a way as to minimize the effort required for me to update to future Terraria versions. Once I make substantial progress on tModLoader, I will also become open to everyone's suggestions for more hooks.
Download and installation instructions are on the forums thread.
Note that this repository will usually be ahead of the current released version.