In React, a popular JavaScript library for building user interfaces, the `setState` method is used to update the state of a component. State refers to the data that determines how a component behaves and renders. When `setState` is called, it schedules an update to the component's state, triggering a re-render to reflect the new state in the user interface. Using `setState` is essential for managing dynamic data in a React application. It allows developers to create interactive components that respond to user actions, such as clicks or form inputs. Properly using `setState` ensures that the UI stays in sync with the underlying data model, enhancing the overall user experience.