A VPS (Virtual Private Server) is a virtualized server environment created on a physical server, using software to divide resources into multiple isolated units. Each VPS operates independently with its own operating system, storage, and bandwidth, providing users with dedicated resources similar to a dedicated server but at a lower cost. VPS hosting is popular for websites, applications, and services that require reliability, speed, and more control than shared hosting. It is commonly rented from commercial providers and allows users to install software, manage security settings, and customize configurations to meet specific needs.