The Source engine is a 3D game engine developed by Valve Corporation. Its unique features include a large degree of modularity and flexibility, an artist-driven, shader-based renderer, accurate lip sync and facial expression technology, and a powerful, efficient and completely network-enabled physics system.
Source is an extremely versatile and powerful engine, and Valve have done some very impressive things with it. However, the tools for it, especially Hammer, are very outdated and not user-friendly. On the upside, you are given the source for HL2 with no sandboxing, which is certainly an advantage over Unity, where you are forced to use sandboxed scripts. However, the user-unfriendly tools make it difficult to quickly prototype or start a game in the Source Engine.