Great question! The earth has actually been cooling down over billions of years. So, why is there still so much heat in the earth? The heat comes from two main sources. Some of the heat is left over from when earth formed (about 4.6 billion years ago!), and some heat is still being produced. The planet formed when smaller pieces of rock, like meteors, asteroids, and small planets (called planetesimals), collided and stuck together. These small pieces of rock and dust were attracted by gravity, and lot of heat was released when they came together. Very shortly after the earth accreted (came together from smaller pieces) it was totally molten (liquid) rock and was all mixed together and not layered. More heat was released when the earth underwent differentiation.

Differentiation was when layers formed, like the core, mantle, and crust. When the core of the earth formed, it could have increased the temperature of the planet by over 2000 Celsius (Francis & Oppenheimer, 2004)!

One more important source of heat in the earth is the decay of radioactive elements. Some elements, like potassium, uranium, and thorium, have isotopes that are unstable. Because they are unstable, they turn into other elements, and this releases a lot of heat. These elements are concentrated in rocks (like granites) in the crust of the earth.

Geologists think that the decay of these elements creates enough heat to make parts of the crust soft. This means that parts of the crust flow like silly putty (but not quite as fast) instead of being cold and hard like a boulder of granite that you might see on the surface of the earth!

references
Francis, P. & Oppenheimer, C. (2004). Volcanoes. New York: Oxford University Press.

The outside of the Earth heats up from light from the sun. The inside of the Earth heats up from radioactive elements in the Earth's interior.

The Earth heats up under the warmth of the hot sun during the day, and even more so during the summer time as that is when the Earth is closest to the sun. The Earth has an atmosphere of gases which acts like a blanket to hold in warmth. The atmosphere includes important things like oxygen and water vapor, but it is mostly made of nitrogen, which is a non-reactive gas. This atmosphere is critical to life on Earth. Otherwise, Earth would be too cold and not have oxygen available for breathing.

You may have heard about certain types of gases like carbon dioxide or methane that are especially effective at warming the Earth. The reason they cause warming is because the bonds that hold together the atoms in these molecules absorb and hold a lot of the sun's heat. These gases are fine in small amounts and they have always existed as small fractions of the atmosphere. However, when too much of these gases starts to fill the atmosphere, we start getting TOO warm. Life here evolved under a narrow average temperature range and if it gets too hot or too cold on the planet, we will start to see changes in habitat and increasing extinctions. That's what everyone is worried about--we are producing very large amounts of carbon dioxide and methane in our agriculture, manufacturing, transportation and electricity production, and it's having an effect on our atmosphere and on the health of our planet and the plants and animals that live here.