HTML uses tags and attributes to format text. Common formatting tags include <b> for bold, <i> for italics, <strong> for strong emphasis, and <em> for emphasis. The style attribute can be added to tags to style elements by setting CSS properties like color, font, size, alignment, and background. Properties allow formatting text color, font, size, alignment, decoration, weight, and more. The <div> tag is used to group elements on a page.