Serializable isolation is the strictest transaction isolation level in PostgreSQL. When a transaction starts, it sets the isolation level to serializable. The transaction executes queries normally but the system tracks conflicts. At commit time, PostgreSQL checks if any concurrent transactions caused conflicts that could break serializability. If no conflicts are found, the transaction commits successfully. If conflicts are detected, the transaction aborts and rolls back to maintain data integrity. This isolation prevents anomalies such as dirty reads, non-repeatable reads, and phantom reads, ensuring transactions behave as if they ran one after another.