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Twilio Studio is a visual editor for creating Twilio applications by dragging and dropping widgets that represent Twilio API components. Users can visually design applications, similar to drawing them on a chalkboard. An example discussed is an SMS Autoresponder, which begins when an incoming text message is received, triggering a response. The tutorial outlines the process of building an SMS autoresponder by creating a new Studio Flow named "SMS Autoresponder". Starting with an empty flow, users will drag in a "Send Message" widget to respond to incoming texts. The widget will be renamed "sendmessage" and populated with the desired response text.