AWS Lambda is a serverless computing service provided by Amazon Web Services that allows users to run code without provisioning or managing servers. It automatically scales applications by executing code in response to events, such as changes in data or system state, making it ideal for tasks like data processing, real-time file processing, and backend services. With AWS Lambda, users can write code in various programming languages, including Python, Java, and Node.js. The service charges only for the compute time consumed, meaning users pay only when their code is running, which can lead to cost savings and increased efficiency in application development.