A Fibonacci heap is a data structure used to implement priority queues. It is composed of a collection of heap-ordered trees that store minimum priority elements. Each node stores a key-value and pointers to its parent and children. Operations like insertion, deletion, and decreasing key values are performed using cuts, melds, and tree rotations to maintain the heap properties. Fibonacci heaps support these operations in amortized O(1) time through techniques like lazy merging of trees and path compression. They are useful for graph algorithms like Dijkstra's and Prim's algorithms that require efficient priority queue operations.