Pointer variables store the memory addresses of other variables. They can be used to access and modify the values stored at those addresses. Pointers allow values to be passed by reference rather than by value, enabling changes made within functions to be reflected back in the calling function. Common pointer operations include dereferencing a pointer to access the value at an address, pointer arithmetic to increment or decrement a pointer to other memory locations, and passing pointers as function arguments to allow modification of variable values.