Source code is a set of instructions written in a programming language that tells a computer how to perform specific tasks. It serves as the foundation for software applications, allowing developers to create programs that can run on various devices. When programmers write source code, they use languages like Python, Java, or C++ to communicate with the computer. This code is then compiled or interpreted to create executable files that users can run. Understanding source code is essential for software development, as it enables the creation and modification of applications.