The Bresenham's line drawing algorithm is an incremental scan conversion algorithm that uses only integer calculations. It works by calculating the difference between the ideal y value and the actual plotted pixel y value at each x value, and determining whether to plot the pixel above or below the line based on whether this difference is positive or negative. The algorithm takes the line endpoints as input, calculates the change in x and y per step, sets an initial decision parameter, and then iteratively plots pixels, updating the decision parameter to determine whether to plot above or below the line at each step.