Virtual memory is a memory management technique that uses secondary storage like hard disks to simulate a larger main memory for a process. It allows processes to have a larger address space than the actual physical memory size by swapping pages between main memory and secondary storage. This helps simplify memory management, protect processes from each other, and allows the operating system to share main memory among multiple processes. Virtual memory uses a memory hierarchy with different storage levels having varying sizes and speeds, and implements paging to map virtual addresses to physical addresses through page tables.