Implicit differentiation is a technique used to find derivatives of functions that cannot be solved explicitly for y. It involves taking the derivative of the entire function using the chain rule, treating y as a variable rather than a function of x. This results in an expression for dy/dx that can be solved algebraically. Like other derivatives, dy/dx gives the slope of the tangent line at a point (x,y) on the curve, and this slope can be used along with the point to find the equation of the tangent line.