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In this Excel tutorial, the Replace function is explained in detail. The video begins by introducing the function and its application. The Replace function replaces part of a text string with another text string. To use it, the user starts with an "=" followed by "REPLACE," which prompts for parameters. The first parameter required is the old text, referring to the existing text from which a replacement will occur. The tutorial emphasizes practical application to enhance understanding of how to effectively use the Replace function in Microsoft Excel and its parameters for various scenarios.