Istio is a platform that provides traffic management, security, and observability for microservices. It addresses challenges of transitioning monolithic applications to distributed microservices. Istio uses Envoy proxies as sidecars to mediate network communication between services and Mixer for policy enforcement and telemetry collection. The control plane manages and configures proxies and Mixers. Istio enables features like traffic management, discovery, policies, security and telemetry collection.