I know just how you can get puzzled by that since both are translated into 'this' in English.
So, let's start with "Este", which is a demonstrative pronoun and precedes a male noun.
Eg.: Este homem é meu amigo.
Because it precedes a noun, it also varies according to it being singular or plural.
Eg.: Estes homens são meus amigos.
'Isto', in turn, doesn't work as a determiner as 'este' so it doesn't precede a noun in a sentence (the noun then is usually implied)
Eg.: Isto é um lápis
Because it doesn't precede a noun, it's invariable either.
I hope it was helpful! ;)