The PyBites Code Challenge involves a three-part task focused on analyzing Twitter data using Python. In the first part, participants are required to write a class called UserTweets that retrieves tweets from the Twitter API using Tweepy or an alternative package, and saves the last 100 tweets of a specified user as a CSV file. The challenge encourages setting up a virtual environment, obtaining API keys, and familiarizing oneself with Python's data model, object-oriented programming, and unit testing through the provided test suite. Participants are advised to fork the challenges repository or sync it if already forked and to use the provided templates for guidance. The challenge emphasizes learning and applying Python skills in a practical context while highlighting that there is no single correct solution, thus promoting creativity and exploration.