The preprocessor is a program that modifies C code before compilation. It performs tasks like including other files, defining symbolic constants and macros, and conditional compilation. Preprocessor directives begin with # and include commands like #include, #define, #ifdef, and #error. The #include directive copies another file into the source code. The #define directive defines symbolic constants or macros. Conditional compilation directives like #if and #ifdef control which code blocks are compiled.