Application Engine is a tool used for batch or online processing of large amounts of data without user intervention. It allows SQL statements, PeopleCode, and program control actions to be defined to perform a business process. Application Engine programs reside in the database, do not require compilation, and provide built-in restart logic. They are made up of sections, steps containing actions like SQL, PeopleCode, and program flow controls. Application Engine can be executed from the Process Scheduler, command line, or called from PeopleCode.