Hooks are functions that allow you to "hook into" React state and lifecycle features from function components. There are three main rules for using hooks: only call them at the top level, only from React functions, and you can call them from custom hooks. Hooks help solve issues with class components by allowing stateful logic to be reused without changing component hierarchy and making complex components easier to understand and test. While hooks provide benefits, there is no need to immediately use them everywhere and classes will continue to be supported.