An inline function is a special type of function in programming that is defined to be expanded in line when it is called, rather than being invoked through the usual function call mechanism. This can lead to performance improvements, as it reduces the overhead of function calls, especially in small, frequently called functions. In languages like C++, the keyword `inline` is used to suggest to the compiler that it should attempt to replace the function call with the function's code. However, the compiler ultimately decides whether to inline the function based on various factors, such as optimization settings and function complexity.