Composer is a tool for dependency management in PHP projects. It allows developers to declare project dependencies in a composer.json file. Composer will then download and install the specified dependencies and their dependencies into a vendor directory. To use Composer, developers first download the Composer phar archive and include it in their system's PATH. They can then install dependencies by running "composer install" or update dependencies to their latest versions with "composer update". Both commands use the composer.lock file to determine what versions to download.