Pandas is an open-source Python library used for data manipulation and analysis. It allows users to extract data from files like CSVs into DataFrames and perform statistical analysis on the data. DataFrames are the primary data structure and allow storage of heterogeneous data in tabular form with labeled rows and columns. Pandas can clean data by removing missing values, filter rows/columns, and visualize data using Matplotlib. It supports Series, DataFrames, and Panels for 1D, 2D, and 3D labeled data structures.