From Diablo Wiki
Ladders exist only for Battle.net play, and are reset periodically. While active, each ladder is populated only by ladder characters. The point of a ladder is to give the economy and character base a fresh start. Players who wish to participate on the ladder create new characters during each ladder season, by clicking the "ladder character" box upon creation. Ladder characters can only play and trade with other ladder characters.
When each ladder season ends, all of the ladder characters are sorted back into the general character population, and if players want to join the new ladder, they must create new characters to do so. Ladder characters can be hardcore or softcore, and ladders work just like the normal game, though there are some Ladder Uniques and Ladder Runewords that can not be found by non-ladder characters.
Diablo 3 introduced Ladders after the launch of Reaper of Souls, with a functionality very similar to Diablo 2's.