Android Studio's Emulator is a tool that allows developers to run and test their Android applications on a virtual device. It simulates various Android devices, enabling users to see how their apps will perform on different screen sizes, resolutions, and Android versions without needing physical devices. The emulator provides features like GPS simulation, phone calls, and text messages, making it easier to test app functionalities. It also supports drag-and-drop for installing APK files, allowing developers to quickly test their applications in a controlled environment before deploying them to real devices.