The G1 Garbage Collector is a memory management tool in the Java Virtual Machine (JVM) designed to optimize the allocation and deallocation of memory. It works by dividing the heap into smaller regions, allowing it to collect garbage in a more efficient manner. This helps improve application performance, especially for large heaps. G1 aims to minimize pause times during garbage collection, making it suitable for applications that require low latency. It prioritizes the collection of regions with the most garbage, ensuring that memory is reclaimed effectively while maintaining responsiveness in running applications.