The throws keyword in Java is used in method declarations to indicate that the method might throw certain checked exceptions, such as IOException. When a method declares throws, any code calling that method must either handle the exception with a try-catch block or declare it further with throws. This ensures that exceptions are properly managed and the program can handle error situations gracefully. The method itself does not handle the exception; it only signals the caller about the possibility. If the caller ignores this requirement, the program will not compile. This flow helps keep Java programs safe and predictable when dealing with errors.