This is a slang expression that means that someone is doing very, very well.
Use this to talk about people succeeding, not just a little but a lot, in things like:
- grades in school
Young people in their 30's or below are most likely to use this expression. Although it uses the word "kill", it doesn't really have a violent association. However, it does have an active, aggressive feel to it.
By the way, you always use "it" in this phrase. You shouldn't replace "it" with another noun.