Deep neural networks learn hierarchical representations of data through multiple layers of feature extraction. Lower layers identify low-level features like edges while higher layers integrate these into more complex patterns and objects. Deep learning models are trained on large labeled datasets by presenting examples, calculating errors, and adjusting weights to minimize errors over many iterations. Deep learning has achieved human-level performance on tasks like image recognition due to its ability to leverage large amounts of training data and learn representations automatically rather than relying on manually designed features.