How does Facebook determine what to show in your newsfeed?

When a user loads newsfeed, the following things happens:

1. recent actions, e.g. some friend posted a photo or listened to some songs, are fetched
2. feed stories are constructed from these actions
3. these stories are scored. There're tons of signals that the feed ranking algorithm looks into to predict how relevant each story is to the user. The relevance is represented by a single score for each story.
4. the stories are sorted by scores, and the top few stories are returned to user.

This is just an overview. The real feed ranking algorithms contains a lot more rules and tweaks. The feed ranking team has promised to publish more about them.