The A* algorithm is a popular pathfinding and graph traversal method used in computer science and artificial intelligence. It efficiently finds the shortest path from a starting point to a target by combining features of both Dijkstra's algorithm and Greedy Best-First Search. It uses a cost function that considers both the distance traveled and an estimated distance to the goal, allowing it to prioritize paths that seem promising. The algorithm maintains a priority queue of nodes to explore, updating costs as it discovers better paths. This approach makes A* particularly effective for applications like video games, robot navigation, and network routing, where optimal paths are crucial.