AJAX allows web pages to load data from the server asynchronously in the background without reloading the page. It uses JavaScript to make requests to the server and update parts of the page with the response. jQuery simplifies AJAX with methods like $.get() that allow making GET requests and updating HTML. For example, an AJAX call could check username availability and update a form to display if a username is available or taken without reloading the page. Security precautions are needed when handling sensitive data with AJAX.