Inheritance in Java is a fundamental concept in object-oriented programming that allows one class to inherit properties and behaviors from another class. This mechanism promotes code reusability and establishes a hierarchical relationship between classes. The class that inherits is called a subclass (or child class), while the class from which it inherits is known as the superclass (or parent class). By utilizing inheritance, developers can create new classes that extend existing ones, enabling them to leverage existing code without duplication. This not only simplifies program logic but also enhances maintainability and scalability in software development.