This verse is part of the story of Abraham and Abimelech making a covenant to establish peace and recognize Abraham's right to a well he dug. The verse specifically means that Abraham separated seven female sheep (ewe lambs) from the rest of his flock.

Here's the breakdown of the meaning and significance:

Abraham: The patriarch, known for his faith and obedience to God.
Set...by themselves: He isolated these seven lambs. This action of separating them is key.
Seven ewe lambs: Female sheep, young. The number seven often symbolizes completeness or perfection in the Bible.
Of the flock: Indicating these were part of Abraham's existing possessions, not newly acquired.

Why did Abraham do this?

The subsequent verses explain the reason:

Genesis 21:29-30: And Abimelech said unto Abraham, What mean these seven ewe lambs which thou hast set by themselves? And he said, For these seven ewe lambs shalt thou take of my hand, that they may be a witness unto me, that I have digged this well.

Abraham gave these seven lambs to Abimelech as a witness or a form of payment and confirmation that he had dug the well. It served multiple purposes:

A sign of the covenant: It solidified the agreement between Abraham and Abimelech. The exchange acted as a symbolic marker and reminder of their promise of peace.
Evidence of ownership: The lambs were a tangible demonstration of Abraham's claim to the well. By giving them to Abimelech, he was publicly acknowledging that he had dug it and that Abimelech recognized his right to it.
Symbolic value: The number seven may have also held symbolic importance, representing completeness or the solemn nature of the agreement.

In short, the verse describes Abraham setting aside seven lambs as a part of a formal agreement with Abimelech, serving as a visual and symbolic confirmation of Abraham's ownership of the well and their covenant of peace.