AWS Lambda is a serverless computing service provided by Amazon Web Services. It allows you to run code in response to events such as changes in data, shifts in system state, or user actions, without provisioning or managing servers. You simply upload your code as a 'function', and Lambda automatically handles the compute resources needed to execute it. Lambda supports multiple programming languages and integrates with various AWS services, making it ideal for building scalable, event-driven applications. You are only charged for the compute time you consume, which can lead to significant cost savings compared to traditional server-based architectures.