A vach nacht (וואך-נאכט, vacht nacht or vakhnakht, lit: "watch night" in Yiddish) is the night before the brit milah ("circumcision") of a male Jewish child, when he is in need of added spiritual protection. A standard "vach nacht" custom, practised by many Ashkenazi Jews, is to have children come and recite the Shema Yisrael and other verses from the Torah near the baby. In Hasidic communities a celebratory meal is held. In many Sephardic communities, the corresponding ceremony is called Brit Yitzchak ("covenant of Isaac".)
Origins
As described in Edut L'Yisrael: Sheiruta di'Tzlota (a text on customs surrounding weddings and births in Judaism, published in Israel c. 1960), the current practice appears to be a combination of two distinct customs.
Firstly, as stressed in the Kabbalistic sources, the night before the circumcision is considered a spiritually dangerous time for the baby; as such, the father would gather ten men to conduct a vigil to study Torah to protect him from metaphysical damage. Thus, this night is given the Yiddish name, "night of watching [or 'guarding']".
Secondly, non-Kabbalistic sources describe a practice several centuries old that on the Friday night before the bris milah, a melamed would take his preschool-age students to say Shema near the baby, and afterwards receive candy (or their equivalent at that point in history, namely nuts or dried fruit.)