Swap space is a portion of a hard drive that is used as an extension of a computer's RAM. When the physical memory is full, the operating system moves inactive data from RAM to swap space, freeing up memory for active processes. This helps maintain system performance when running multiple applications. Using swap space can prevent system crashes due to memory shortages, but it is slower than RAM because it relies on disk storage. Therefore, while swap space is useful for managing memory, having sufficient RAM is essential for optimal performance in computing tasks.