Binary search is an efficient algorithm for finding a target value within a sorted list or matrix. It works by repeatedly dividing the search space in half and eliminating half of the elements from consideration. The steps are: 1) sort the array, 2) set boundaries for search space, 3) check middle element and eliminate half based on comparison to target, 4) repeat until target is found or eliminated. It has best case performance of O(1) when finding the target on the first try, and worst case of O(log n) when searching the entire space. Binary search is commonly used to quickly find values in applications like computer games.