Apache JMeter is an open-source performance testing tool used to test the performance of web applications. It works by acting like a group of users sending requests to a target server and collecting response times and other statistics. JMeter is useful for performance testing because it is free to use, supports multiple protocols, has a user-friendly GUI, and can generate detailed reports on test results. To perform a test, users create a test plan with thread groups to simulate users, HTTP requests to send to the server, and listeners to monitor responses and performance.