A data URL is a way to include small files directly in web pages or applications without needing a separate file. It encodes the file's data in a string format, allowing it to be embedded directly in HTML or CSS. This is useful for images, fonts, or other resources, making it easier to manage and reducing the number of server requests. Data URLs start with a prefix that indicates the type of data, followed by the actual data encoded in Base64. For example, an image can be represented as a data URL, which can simplify the loading process and improve performance for small assets like icons or logos.