MapReduce is a programming model for processing large datasets in a distributed manner across clusters of machines. It involves two functions - Map and Reduce. The Map function processes input key-value pairs to generate intermediate key-value pairs, and the Reduce function merges all intermediate values associated with the same intermediate key. This allows for distributed processing that hides complexity and provides fault tolerance. An example is counting word frequencies, where the Map function emits word counts and the Reduce function sums the counts for each word.