PHP is a server-side scripting language that can be embedded into HTML. It is used to dynamically generate client-side code sent as the HTTP response. PHP code is executed on the web server and allows variables, conditional statements, loops, functions, and arrays to dynamically output content. Key features include PHP tags <?php ?> to delimit PHP code, the echo command to output to the client, and variables that can store different data types and change types throughout a program.