Select-String is a PowerShell command that searches text or files for a specific pattern. It reads each line of input and checks if the pattern is present. If a match is found, it outputs the line number and the matching line. If no match is found, it moves to the next line without output. This continues until all lines are checked. The example code searches an array of two strings for the word 'hello'. The first line matches and is output, the second does not match and produces no output. This process helps quickly find text in files or strings.