。
She sings well.
Literal
She [topic-は] skillfully song [object-を] sings.
上手に (じょうずに) is the adverbial form of 上手 ('skilled'), meaning 'skillfully, well.' 歌を歌う (うたをうたう, 'to sing a song') is a cognate object construction — the verb and its object share the same root, like English 'sing a song' or 'dance a dance.'