S3 Texture Compression is a method used to reduce the size of texture images in computer graphics, particularly in video games. It helps save memory and improve performance by compressing textures without significantly losing quality. This technique is especially useful for real-time rendering, where quick access to textures is essential. The compression works by dividing textures into small blocks and using algorithms to store color information more efficiently. S3 Texture Compression is widely supported in various graphics hardware and software, making it a popular choice for developers looking to optimize their applications while maintaining visual fidelity.