The BIOS is low-level firmware that initializes hardware at startup, acts as an interface between hardware and OS, and retains settings via CMOS battery. It performs POST to check hardware, identifies bootable drives, and configures components like memory, ports, and slots. BIOS settings can be accessed during boot by pressing a key like F2 or DEL. Newer UEFI firmware improves on BIOS but still relies on it for configuration, POST, and setup.