The SFTP Connector allows Mule applications to securely exchange files with external resources using the SSH protocol. It can be used as an inbound endpoint to receive files or an outbound endpoint to send files. When used as an inbound endpoint, it triggers flows when new files are received. Configuration involves placing the SFTP endpoint in the flow and configuring properties like the host, port, path, user and password on the General and Advanced tabs. An example flow shows an SFTP inbound endpoint pulling files and passing them to a file outbound endpoint.