Windowed Mode is a display setting that allows a program, such as a video game or application, to run in a resizable window rather than taking up the entire screen. This mode enables users to multitask easily, as they can switch between different applications without needing to minimize or close them. In Windowed Mode, the program's interface is contained within a bordered window, which can be moved around the desktop. This feature is particularly useful for users who want to reference other materials or communicate with others while using the program, enhancing overall productivity and convenience.