A compiler is a program that converts source code written by humans into machine code that computers can execute. It processes the code in several steps: first, it reads the source code as text. Then, lexical analysis breaks the text into tokens, which are small pieces like keywords and symbols. Syntax analysis arranges these tokens into a tree structure showing the program's grammar. Semantic analysis checks the meaning to ensure the program is logically correct. Optimization improves the code to run better. Finally, code generation produces machine code instructions, which are saved as an executable file. This step-by-step process ensures the program can run efficiently on a computer.