The Fast Fourier Transform (FFT) is an efficient algorithm used to compute the Discrete Fourier Transform (DFT) and its inverse. It reduces the computational complexity of DFT from O(N²) to O(N log N), making it a vital tool in digital signal processing, allowing for quick analysis of discrete-time signals and systems. The FFT enables us to decompose a signal into its constituent frequencies, which is essential for understanding the behavior of systems in various engineering applications.