Handlebars is a popular templating engine used in web development to create dynamic HTML content. It allows developers to separate the HTML structure from the data, making it easier to manage and update web applications. By using simple syntax with curly braces, developers can insert variables and control structures directly into their templates. One of the key features of Handlebars is its ability to create reusable templates, which can help streamline the development process. It supports helpers, which are custom functions that can perform operations on data, enhancing the functionality of templates. Overall, Handlebars simplifies the process of generating HTML by providing a clear and efficient way to work with data.