Parameter	Description
string	Required. Specifies the XML string to use
class	Optional. Specifies the class of the new object
options	Optional. Specifies additional Libxml parameters. Is set by specifying the option and 1 or 0 (TRUE or FALSE, e.g. LIBXML_NOBLANKS(1)) Possible values: LIBXML_COMPACT - Set small nodes allocation optimization. This may improve the application performance LIBXML_DTDATTR - Set default DTD attributes LIBXML_DTDLOAD - Load external subset LIBXML_DTDVALID - Validate with the DTD LIBXML_NOBLANKS - Remove blank nodes LIBXML_NOCDATA - Set CDATA as text nodes LIBXML_NOEMPTYTAG - Change empty tags (e.g. <br/> to <br></br>), only available in the DOMDocument->save() and DOMDocument->saveXML() functions LIBXML_NOENT - Substitute entities LIBXML_NOERROR - Do not show error reports LIBXML_NONET - Stop network access while loading documents LIBXML_NOWARNING - Do not show warning reports LIBXML_NOXMLDECL - Drop the XML declaration when saving a document LIBXML_NSCLEAN - Remove excess namespace declarations LIBXML_XINCLUDE - Use XInclude substitution LIBXML_ERR_ERROR - Get recoverable errors LIBXML_ERR_FATAL - Get fatal errors LIBXML_ERR_NONE - Get no errors LIBXML_ERR_WARNING - Get simple warnings LIBXML_VERSION - Get libxml version (e.g. 20605 or 20617) LIBXML_DOTTED_VERSION - Get dotted libxml version (e.g. 2.6.5 or 2.6.17)
ns	Optional
is_prefix	Optional

Example

<?php
$xmlstring = <<<XML
<?xml version="1.0" encoding="ISO-8859-1"?>
<note>
<to>Tove</to>
<from>Jani</from>
<heading>Reminder</heading>
<body>Don't forget me this weekend!</body>
</note>
XML;

$xml = simplexml_load_string($xmlstring);

var_dump($xml);
?>

The output of the code above will be:

object(SimpleXMLElement)#1 (4)
{
["to"]=> string(4) "Tove"
["from"]=> string(4) "Jani"
["heading"]=> string(8) "Reminder"
["body"]=> string(29) "Don't forget me this weekend!"
}

Complete PHP SimpleXML Reference