The sed command, short for stream editor, is a powerful tool used in Unix and Unix-like operating systems for parsing and transforming text. It allows users to perform basic text transformations on an input stream (a file or input from a pipeline) using a simple and efficient syntax. With sed, users can easily search, replace, insert, and delete text within files or streams. Its ability to handle regular expressions makes it particularly useful for complex text manipulation tasks, making it a staple for system administrators and developers alike.