OSGi is a module system for Java that handles lifecycles of individual bundles, provides class loading isolation between bundles, and manages dependencies and versioning. It treats each deployable unit as a bundle, which is a JAR file with additional metadata. OSGi allows restricting visibility of classes on a per-bundle basis and loading classes from different bundles through separate classloaders. Bundles in OSGi go through lifecycle states like installation, resolution, starting, stopping, and updating. OSGi also supports a service registry for bundles to publish and discover services. Popular implementations of OSGi include Apache Felix and Eclipse Equinox.