Parashat Kedoshim begins by outlining one of the most important mitzvot in the Torah without specifically defining what it is: for the Israelite community "to be holy".
This injunction is immediately qualified by the statement "for I, the Lord your God, am holy". We can surmise from this that we are to be holy because God is holy and this means that we should act in His image, b'ztelem Elohim.
What does this mean? What are God'' expectations when He commands such an undefined yet powerful law? How are we to be holy?
The answer lies in the two parashiyot that this verse connects: Acharei Mot and Kedoshim. The laws that are laid out cover both our spiritual lives (with an outline of the Yom Kippur service) and our mundane lives, with a long list of laws that deal with relationships between human beings (bein adam l'chavero). God is demanding that we live our lives as He would: to do everything, even the small things, in an appropriate manner.
Moreover, because we are given the freedom to make our own decisions, we should live our lives in exemplary ways. It is our responsibility to set an example for future Jewish generations to follow, giving them a set of core values on which to build their own lives.
This is what God meant when He commanded the Israelite nation "to be holy because I the Lord your God am holy".