To perform the squat with correct form, first start with your feet a little wider than shoulder width with a slight bow outward. As you squat down, you want to reach your butt back and keep your chest up. If this is done correctly, you will create an arch in your back as your drop into your squat. Sometimes it is helpful to look up as you reach your butt back to help maintain this arch. Your weight should be driving into your heels, almost to the point where you are falling backwards. When you reach 90 degrees, start the movement upwards by pushing your hips forward and squeezing your butt at the top.
This exercise is primarily a quad, hamstring, and butt exercise. However, to balance your weight, your core is activated on and off throughout the squat. Hip flexors and lower back are also used in this movement. Fight to not let your heels come off the ground throughout the entire movement. If they do, added stress goes on the knees and the targeted muscles aren't used as much.