Extensible Stylesheet Language Transformations (XSLT) is a powerful language used for transforming XML documents into different formats, such as HTML, plain text, or other XML structures. It allows developers to define rules for how the content and structure of an XML file should be modified, making it easier to present data in various ways. XSLT works by applying a set of templates to the XML data, matching specific elements and attributes. This process enables the extraction and rearrangement of information, facilitating tasks like data presentation, report generation, and integration with web applications.