Python variables are essential components in programming that serve as named locations in memory to store data values. They allow developers to create flexible and dynamic code by enabling the storage and manipulation of information throughout a program’s execution. In Python, variables are created simply by assigning a value using the assignment operator =. The naming conventions for variables are straightforward: they must start with a letter or an underscore, cannot begin with a number, and are case-sensitive. Understanding how to effectively use variables is crucial for writing clear and efficient Python code.