The FOREIGN KEY constraint connects a column in one table (child) to a primary key in another table (parent). This ensures data integrity by allowing only values in the child column that exist in the parent. The flow starts by creating the parent table, then the child table with the foreign key. When inserting data, the database checks if the referenced parent value exists. If yes, the insert succeeds; if not, it fails with an error. For example, inserting an employee with a department ID that does not exist in Departments causes a foreign key violation error. NULL values are allowed if the foreign key column is nullable, meaning no reference is made. This constraint helps keep related data consistent across tables.