A stored procedure is a named set of SQL statements that are stored and executed on a database server. It is a pre-compiled and reusable database object that can be called and executed multiple times. Stored procedures are used to encapsulate and organize complex database operations, providing a convenient way to perform tasks, manipulate data, or apply business logic within the database system. They offer advantages such as improved performance, reduced network traffic, and enhanced security by allowing controlled access to data.