The `__init__` method in Python is a special function used for initializing newly created objects. It is part of a class and is automatically called when an object of that class is instantiated. This method allows you to set initial values for the object's attributes, ensuring that the object starts its life in a defined state. In the context of object-oriented programming, `__init__` is crucial for defining how an object behaves and what data it holds. By using parameters in `__init__`, you can customize the initialization process, making it easier to create objects with specific characteristics, such as those found in classes or instances.