The brightening was caused by a rapid expanding of the star's outer layer - making this celestial body (at the maximum size) the brightest star in our Galaxy, with a radius comparable to the orbital radius of Jupiter... (originally the star was approximately 5 times larger than our Sun).

The dynamics of brightening are totally unique, and pretty much unexplainable: multiple sharp bursts (with phenomenal speed of expansion), followed by weird lulls.

The most interesting possibility is that V838 Monocerotis may have swallowed its giant planets.

"If one of the planets entered into the atmosphere of the star, the stellar atmosphere would have begun slowing down the planet, releasing more kinetic energy into the star. The star's envelope would then warm up enough to trigger deuterium fusion, which would lead to rapid expansion. The later peaks may then have occurred when two other planets entered into the expanded envelope." (source)