Skill Mods in The Division are modifications you can make to your base Skills which improve or alter the way the skills function.
Each Skill with the excpetion of Signature Skills has 3 mods plus a Master Mod which can be applied. You may have 1 mod active at any given time and mods can be swapped in and out on the fly. You unlock Skill mods by completing Missions and upgrading the appropriate wings in your Base of Operations.
After building all the upgrades within the skill's corresponding wing in the Base of Operations, the skill's Master Mod becomes available, which is a passive attribute that is always active. At the point of unlocking the Master Mod, you will then have a Skill, 1 Mod and the Master Mod all active at any given time.