Infinite impulse response (IIR) refers to a type of digital filter that produces an output signal based on both current and past input signals, as well as past output signals. This means that the response to an impulse input lasts indefinitely, allowing for feedback in the filter's structure. IIR filters are characterized by their ability to create complex frequency responses while often requiring fewer coefficients than their finite impulse response (FIR) counterparts, making them efficient in terms of computational resources.