Uso (うそ) means “a lie”. Said as a reaction — うそ！ — it usually means “no way!” or “you're kidding!”: pure surprise, not an accusation.
A character hears big news and gasps うそ…！ The subtitle says “That's a lie!”, and suddenly the scene sounds like an argument. Nobody is being called a liar. It's simply the Japanese “no way!”.
Two jobs, one word
As a noun, うそ is a lie. You “tell” one with the verb つく: うそを つく.
As a reaction, うそ！ is surprise at news that is hard to believe, good or bad. It is close to ほんとう？ (“really?”), and the two often come together.
あした、がっこうは やすみですよ。
There's no school tomorrow, you know.
うそ！ ほんとうですか。
No way! Really?
Can you use it?
With friends, yes — うそ！ and うそでしょう？ (“you're joking, right?”) are completely natural. With a teacher, a boss or someone you have just met, say ほんとうですか instead: a bare うそ can sound as if you doubt their word.