Yocto is an open source project that provides tools and templates for creating custom embedded Linux systems. It uses a build system called BitBake and metadata to automate the build process. This reduces development time and improves quality, stability, and repeatability. Yocto supports targets like ARM, PowerPC, MIPS and x86 and runs on common Linux desktop platforms. It allows building images, SDKs, and other artifacts for deployment on embedded hardware.