Android - Is Android based upon Linux?

Yes, here is the source code download and what you need to use it.

http://source.android.com/download

• And the license agreement: http://source.android.com/license
• Home Page: http://www.android.com/
• The wiki: http://en.wikipedia.org/wiki/Android%5F%28operating%5Fsystem%29

From the wiki:

At Google, the team led by Rubin developed a mobile device platform powered by the Linux kernel which they marketed to handset makers and carriers on the premise of providing a flexible, upgradeable system.

The short answer is Yes.

The longer answer is... Android uses a modified Linux kernel to run the basic operating system functions. However, Android does not use the same libraries that you would see in a typical desktop Linux system (basic libraries such as glibc), so you can't just run any program on Android that you can on other Linux systems. Besides the fact that some of the libraries are different, Android does not provide a very easy way of running applications that are not build on their Java-like API they call the "Andoird Platform"

Yes! It helps to talk about "Android the platform" and "Android the OS"

• Android the Operating system: This is Linux. It runs the Linux kernel so it very much is Linux. The standard libraries are a little different and you as a user or developer of an Android app won't have anything to do with this "linuxey" side of things*.
• Android the Platform: This is a Java-based-desktop platform that you can write applications for. It uses the Dalvik** VM to run specially packaged Java jar files containing your code. This is the part of the Android phone you see and interact with every day*

*Unless you root your device, then you have access to everything.
**Dalvik is also a cute little 'town' in Iceland with some great glaciers, two ferries to wonderful islands and no good coffee bar.