Kafka Streams is a client library for building distributed applications that process streaming data stored in Apache Kafka. It provides a high-level streams DSL that allows developers to express streaming applications as set of processing steps. Alternatively, developers can use the lower-level processor API to implement custom business logic. Kafka Streams handles tasks like fault-tolerance, scalability and state management. It represents data as streams for unbounded data or tables for bounded state. Common operations include transformations, aggregations, joins and table operations.