WordPress can be used as a learning management system (LMS) through the use of plugins. The Namaste-LMS plugin transforms WordPress into a full-featured LMS, allowing users to manage courses, add students, publish course content and structure, and provide assessments through the additional WATU exam plugin. Other plugins like Google Analytics for WordPress and User Gravatar integrate additional functionality like analytics and user profiles. Setting up WordPress as an LMS primarily requires installing WordPress, selecting and configuring the necessary plugins, and creating instructions for students.