The @SpringBootApplication annotation is a key part of starting a Spring Boot application. When the main method runs, it hits this annotation which combines three important annotations: @Configuration, @EnableAutoConfiguration, and @ComponentScan. This means Spring Boot prepares the application context by setting up configuration, automatically configuring beans based on your project setup, and scanning for components like services and controllers. The SpringApplication.run() method triggers this process. After setup, the application context is ready and the app runs in the background, waiting for requests. The main method itself finishes but the app keeps running. This annotation simplifies starting Spring Boot apps by bundling these features together.