A proxy server is a server that acts as a gateway between a client and the internet. It receives requests from clients seeking resources (e.g., web pages) and forwards these requests to the target server. Upon receiving the response from the target server, the proxy server sends the data back to the client. Proxy servers can provide various functions such as anonymity by masking the source IP address, filtering requests, caching commonly accessed content for quicker responses, and monitoring for security threats. They can also help bypass geo-restrictions and content filtering imposed by firewalls.