Apache Kafka Streams (KStreams) is a Java client library designed for real-time stream processing, facilitating smoother application and microservices development. It processes incoming data streams, such as aggregating word occurrences or filtering fraudulent transactions, using a domain-specific language (DSL) that provides methods like Map, Filter, and Join for data transformation. Redpanda, an alternative to Apache Kafka, offers API compatibility, ease of management, and notable performance improvements, serving as an effective message broker for KStreams without requiring code changes. In a tutorial setting, users can set up a KStreams application with Redpanda, utilizing Docker for configuration and exploring functionalities such as stream aggregation and joining multiple streams. The process involves setting up producers and consumers, defining topics, and using KStream and KTable objects to manage and transform data flows, with Redpanda serving as a seamless drop-in replacement for Kafka to enhance message-processing capabilities.