An anchor tag is an HTML element used to create hyperlinks, allowing users to navigate from one webpage to another. It is represented by the `<a>` tag, which stands for "anchor." The most important attribute of the anchor tag is the `href` attribute, which specifies the URL of the page the link points to. When users click on an anchor tag, they are directed to the specified location, which can be an external site, another page within the same site, or even a specific section of a page using an ID. This functionality is essential for web navigation and enhances user experience on the internet.