An interrupt is an asynchronous signal that indicates an event needs the processor's immediate attention, preempting the current instruction. Interrupts save processing time by allowing other tasks to execute while waiting for an event, providing faster response. When an interrupt occurs, the processor stores its state, jumps to the interrupt service routine to handle the event, then restores its state and returns to the original program. The document discusses interrupts in microprocessors and various interrupt sources for PIC microcontrollers like external pins, timers, and peripherals. It provides an example of using the RB0 pin interrupt to light an LED when a button is pressed.