Extreme Programming (XP) is an agile software development methodology that focuses on rapid delivery of working software, customer satisfaction, simplicity, communication, and feedback. Key practices of XP include having working software delivered frequently in small releases, writing automated tests before code, pairing programmers, continuous refactoring, and integrating code daily. The goal of XP is to improve productivity and quality through practices like test-driven development, simple design, pair programming, and frequent feedback from customers.