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The "Undo" feature in Excel allows you to reverse mistakes made while working in the program. Located in the quick access toolbar, the third button from the left is the "Undo" button, which can be used to undo your last action or even multiple previous actions. This feature is helpful for correcting mistakes quickly and efficiently, with the ability to undo up to 100 steps. It is a useful tool for managing and editing data in Excel to maintain accuracy in your work.