Inheritance is a fundamental concept in object-oriented programming (OOP) that allows a class to inherit properties and behaviors from another class. In C#, inheritance is achieved through the 'class' keyword and the use of the colon (:) symbol to specify the base class. Derived classes, also known as subclasses or child classes, can extend and specialize the functionality of the base class, known as the superclass or parent class. Inheritance promotes code reuse, modularity, and supports the principle of polymorphism.