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In this video tutorial, the presenter explains how to use the Replace function in Microsoft Excel. The Replace function allows users to substitute part of a text string with a new text string. The tutorial walks through the application of the function, starting with entering the formula in cell B2. The first parameter required is the old text, which is the text to be replaced. The video emphasizes understanding the parameters of the function to implement it effectively in various scenarios. The instructor aims to provide a practical approach to learning the Replace function through hands-on demonstration.