Run-length encoding (RLE) is a lossless data compression algorithm that represents data as a series of runs with a single data value and count. It works by storing repeated data values as a single data value and count, using an escape symbol to identify runs. RLE is useful for compressing data that contains many repeated values, like pixel data in images, but is not effective on files without many repeated runs as it can increase file size. RLE is commonly used to compress pixel data in image file formats like PCX and boot graphics in Android.