Terraform is an open-source infrastructure as code (IaC) tool created by HashiCorp. It allows users to define and provision data center infrastructure using a declarative configuration language. Terraform codifies cloud APIs into declarative configuration files, enabling users to automate the deployment and management of cloud and on-premises resources in a consistent, reproducible manner. It supports multiple cloud service providers such as AWS, Google Cloud, and Azure, making it a versatile tool for multi-cloud and hybrid-cloud environments. Terraform is widely used for its ability to manage complex infrastructure setups with simplicity and predictability.