Starting today WhatsApp will be encrypting every message, photos, videos and calls originating from users using the latest version of the WhatsApp in its network.
The end to end encryption on WhatsApp is achieved using components of Open Whisper System's TextSecure app, which ensures that communications between any two parties has not been compromised by a Man In The Middle attack. The end to end encryption would ensure that users can text and speak freely without fear that their communication would be listened in by cybercriminals, hackers, government agencies (cough *FBI*) or even engineers from WhatsApp.
The end to end encryption feature is being rolled out to all users by default and all they have to do is to ensure that they update their WhatsApp client. To check if your your conversation is encrypted, check the contact info or the group info.
Source: WhatsApp blog