Active Record is an object-relational mapping (ORM) pattern that allows developers to interact with a database using objects rather than SQL queries. It establishes a direct association between classes and database tables, and between class objects and table rows. The key characteristics of Active Record include directly mapping classes to tables, objects to rows, and using finders and setters to encapsulate data access. The Ruby on Rails framework includes an implementation of Active Record to provide data modeling and database access functions.