MPLS (Multi-Protocol Label Switching) is introduced as a "Layer 2.5" protocol that sits between traditional Layer 2 and Layer 3 networking. It works by assigning labels to packets at ingress routers and using those labels for fast forwarding decisions without additional routing lookups at subsequent routers. This improves performance over traditional IP routing. MPLS also enables traffic engineering through protocols like RSVP-TE that allow reserving bandwidth on specific paths. Other key MPLS concepts covered are label switching, MPLS signaling protocols, label stacking, pseudowires, VPN services, and fast reroute for improved convergence during failures.