Cython is a compiler that takes Python code and converts it to C/C++ code. This allows Python code to achieve performance close to C without having to write it in C. Cython code looks like Python code but adds optional static typing to enable optimizations. It allows interfacing with external C libraries directly for better performance than going through Python wrappers. Cython is commonly used in scientific computing libraries like NumPy, Pandas, and scikit-learn to improve performance of computationally intensive code.