Tu BiShvat appears in a Mishnah in Tractate Rosh Hashanah (page 2a) as one of the four new years in the Jewish calendar. Kabbalists have used the tree as a metaphor to understand Hashem's relationship to the spiritual and physical worlds. Moshe Chaim Luzzatto, in his 18th century classic The Way of Hashem, teaches that the higher spiritual realms are roots that ultimately manifest their influence through branches and leaves in the lower realms.
Man's very name -- Adam -- is derived from the word Earth, adama. While man is at once the pinnacle of creation, the master and caretaker of the world, he is also dependent on the earth for his most basic needs. The Torah, in outlining the negative commandment of destroying fruit trees, refers to man himself as a tree of the field (Deut. 20:19). Our sages learn from this verse a prohibition against any needless destruction. In other words, fruit trees serve as the archetype for man's relationship and responsibility to his environment.
It was through a mistake in eating fruit that caused Adam and Eve's exile from the Garden of Eden. Eating fruit is a metaphor for our interaction with this world. Correct usage leads to a perfected world and spiritual bliss. Misuse leads to destruction and spiritual degradation.
In the 16th century, Rabbi Yitzchak Luria (1534-1572) of Safed and his disciples created a Tu BiShvat Seder that celebrated the Tree of Life. The Seder evokes Kabbalistic themes of restoring cosmic blessings by repairing and strengthening the Tree of Life, and elucidates the Four Worlds of Emanation metaphorically as a tree with roots, trunk, branches, and leaves.
During the Seder, many Sephardim eat etrogim since many commentators say that the Tree of Life was an etrog tree.
Kabbalah teaches us that the fruits one eats can be divided progressively from lower to higher, that is, from material to spiritual:
Fruits and nuts with inedible exteriors and edible insides, such as bananas, walnuts, and pistachios;
Fruits and nuts with edible exteriors but with a pit inside, such as dates, apricots, and olives; and
Fruit that is eaten whole, such as figs and berries.
Kabbalistic tradition teaches that in effect, one is traveling from the most external, manifest dimension of reality, symbolized by the fruits with a shell, to the most inner, spiritual dimension, symbolized by the completely edible fruits, and even more so by a fourth level which may be likened to smell.
Rabbi Chaim Vital wrote:
My teacher [the holy Arizal] used to say that one must intend while eating the fruits [at the Tu BiShvat Seder] to repair the sin of Adam who erred by eating fruit from the tree.
Partaking in the physical world inappropriately, for its own sake, lowers us spiritually and diminishes our enjoyment. The solution is to engage in the physical world as a means to a worthy end -- i.e. appreciating the greatness of Hashem who created all.
The traditional Tu Bish'vat Seder ends with a prayer which states, in part, "May all the sparks, scattered by our hands, or by the hands of our ancestors, or by the sin of the first human regarding the fruit of the tree, be returned and included in the majestic might of the Tree of Life.’