The Chi Rho symbol was formed by overlaying the Greek capital letters chi and rho (X and P) so that the vertical stroke of the rho passes through the centre of the chi. These characters were used as they were the first two characters of the Greek word ΧΡΙΣΤΟΣ (Khristos; or Christ). The symbol was adopted for use as a military standard by Constantine the Great, and from then onwards became part of the official imperial insignia of the Byzantine Empire.
To find out more about the Byzantine world please see our relevant blog post: The Byzantine Empire: Art and Christianity