All bourbons are whiskey, but not all whiskeys are bourbon...For a whiskey to qualify as bourbon, the law--by international agreement--stipulates that it must be made in the USA. It must be made from at least 51% and no more than 79% Indian corn, and aged for at least two years. (Most bourbon is aged for four years or more.) The barrels for aging can be made of any kind of new oak, charred on the inside. Nowadays all distillers use American White Oak, because it is porous enough to help the bourbon age well, but not so porous that it will allow barrels to leak. It must be distilled at no more than 160 proof (80% alcohol by volume). Nothing can be added at bottling to enhance flavor or sweetness or alter color. The other grains used to make bourbon, though not stipulated by law, are malted barley and either rye or wheat. Some Kentucky bourbon makers claim that the same limestone spring water that makes thoroughbred horses' bones strong gives bourbon whiskey its distinctive flavor. Kind of like that "it's the water" thing with Olympia beer.
Bourbon can be made anywhere in the U.S., but all but a couple of brands are made in Kentucky. Only the state of Kentucky can produce bourbon with its name on the label. The name comes from Bourbon County in the central bluegrass region of Kentucky. (Source: Straight Dope Science Advisory Board)