A database index is a data structure that improves read query performance by creating ancillary data structures outside of the main database table, allowing for faster scans. Indexes speed up read queries with filters, particularly those involving multiple columns. By creating an index on specific columns, such as the "most recent activity" column in a users table, MySQL can improve query efficiency to O Log(n) from O(N/2). While indexes are beneficial for read queries, they can negatively impact performance if not used carefully, taking up space and increasing INSERT query times. There are various types of database indexes, including unique, full-text, and spatial indexes, each with their own characteristics and use cases. MySQL provides a range of options for creating indexes, allowing for customization of index type, storage, and other parameters.