Hooks allow code to interact with and modify other code at certain points in the WordPress page lifecycle. There are two main types of hooks: actions, which execute code when events occur; and filters, which modify data before it is sent to the browser or database. Actions are used when you want something to happen, like sending an email when a post is published. Filters are used when you want to change something, like adding text to post titles. Hooks are constructed by specifying a tag name, callback function, priority, and arguments.