AWS Lambda is a serverless compute service that allows you to run code without provisioning or managing servers, making it ideal for event-driven and highly scalable applications. It works by executing functions in response to triggers such as API calls, S3 uploads, DynamoDB updates, or scheduled events. When an event occurs, Lambda automatically provisions the required compute resources, runs your function, and then shuts down the environment when execution completes. You only pay for the compute time consumed during execution, which helps optimize costs. Lambda supports multiple languages, integrates seamlessly with other AWS services, and scales automatically by running multiple instances concurrently. This model enables teams to build lightweight, modular, and responsive applications without handling traditional infrastructure management.