ButterKnife is a library that reduces boilerplate code for Android views by using annotation processing. It allows binding views to fields, setting listeners to methods, and operating on multiple views at once. To use it, annotations like @BindView and @OnClick are added and ButterKnife handles finding and casting views and wiring up listeners. It also supports binding resources, non-activity classes, view lists, and resetting bindings on configuration changes to prevent memory leaks.