Test-Driven Development (TDD) is a software development approach where tests are written before the actual code. This process involves creating a test that defines a desired function or improvement, running the test to see it fail, and then writing the minimum amount of code necessary to pass the test. This cycle is repeated, promoting better design and fewer bugs. TDD encourages developers to think about the requirements and design of their code upfront. By focusing on tests first, it helps ensure that the final product meets the specified requirements and functions correctly, leading to more reliable software development practices.