Anchor text refers to the clickable text within a hyperlink that directs users to another webpage or document. It is typically underlined and displayed in a different color than the surrounding text, making it stand out and easily identifiable. Anchor text serves as a descriptive label for the link, providing users with a preview of the content they will be directed to. It also plays a crucial role in search engine optimization (SEO) by providing context and relevance to the linked page. A well-crafted anchor text can entice users to click on the link and improve the overall user experience.