A Huffman Tree is a type of binary tree used in data compression. It helps to encode data efficiently by assigning shorter binary codes to more frequently occurring symbols and longer codes to less frequent ones. This method reduces the overall size of the data, making it easier to store and transmit. The construction of a Huffman Tree involves creating a priority queue of nodes, where each node represents a symbol and its frequency. The two nodes with the lowest frequencies are combined to form a new node, and this process continues until only one node remains, which becomes the root of the tree.