Shader Model 4.0 is a graphics programming interface introduced by Microsoft as part of the DirectX 10 API. It allows developers to create more complex and realistic visual effects in video games and applications by providing advanced features for writing shaders, which are small programs that determine how graphics are rendered on the screen. This model supports new techniques such as geometry shaders, which can manipulate 3D shapes in real-time, and improved texture handling. With Shader Model 4.0, developers can achieve higher levels of detail and realism, enhancing the overall visual experience in modern graphics applications.