Bundle sheath cells are specialized plant cells found in the vascular tissue of leaves, particularly in C4 plants. They surround the vascular bundles, which contain xylem and phloem. These cells play a crucial role in photosynthesis by helping to concentrate carbon dioxide, allowing for more efficient sugar production. In C4 photosynthesis, bundle sheath cells work alongside mesophyll cells to minimize water loss and maximize energy capture. They contain chloroplasts, which are the sites of photosynthesis, and help in the conversion of carbon dioxide into glucose. This adaptation is especially beneficial in hot and dry environments.