Color depth refers to the number of bits used to represent the color of a single pixel in an image. It determines how many different colors can be displayed. For example, an image with a color depth of 8 bits can show 256 colors, while a 24-bit image can display over 16 million colors, allowing for more detailed and vibrant images. Higher color depth improves the quality of images, especially in areas with subtle color variations, such as skin tones or gradients. However, it also requires more storage space and processing power. Devices like monitors and printers often have specific color depth capabilities that affect their performance.