Bilinear interpolation is a mathematical method used to estimate values at points within a two-dimensional grid. It works by taking the average of the values at the four nearest grid points, weighted by their distance from the point of interest. This technique is commonly used in image processing and computer graphics to create smooth transitions between pixel values. In bilinear interpolation, the process involves two linear interpolations: first along one axis and then along the other. This allows for a more accurate estimation of values compared to simpler methods, such as nearest-neighbor interpolation, making it useful in applications like image scaling and terrain modeling.