Source SDK is a software development kit created by Valve Corporation that allows developers to create and modify games using the Source engine. It provides tools for designing levels, creating new game content, and scripting gameplay mechanics, making it accessible for both amateur and professional developers. The SDK includes various applications, such as Hammer Editor for level design and Model Viewer for viewing 3D models. It supports popular games like Half-Life 2 and Counter-Strike: Source, enabling users to build custom mods and enhance their gaming experience through user-generated content.