Babel is a JavaScript compiler that converts ECMAScript 2015+ code into a backwards compatible version of JavaScript that can be run on older browsers. It transpiles modern JavaScript syntax into an older form that is understood by browsers. Babel also includes polyfills that provide modern functionality on older browsers. While Babel enables the use of new JavaScript features and ensures compatibility across browsers, it does make the transpiled code more difficult to understand and larger in size compared to the original code.