The Needleman-Wunsch algorithm is a method used in bioinformatics for aligning sequences, such as DNA, RNA, or proteins. It identifies the best possible alignment between two sequences by maximizing their similarity. This is achieved through a dynamic programming approach, which systematically evaluates all possible alignments and assigns scores based on matches, mismatches, and gaps. The algorithm works by creating a scoring matrix that represents the alignment scores for different combinations of characters from the sequences. It then traces back through this matrix to find the optimal alignment, making it a fundamental tool for sequence analysis in genetics and molecular biology.