How does the A* pathfinding algorithm work?

A* combines Dijkstra's shortest path with heuristic guidance. Uses f(n) = g(n) + h(n) where g is actual cost from start, h is heuristic estimate to goal. Priority queue processes nodes by lowest f-value. Heuristic must be admissible (never overestimate) for optimal path, and consistent for efficiency. Common heuristics: Manhattan distance (grid), Euclidean distance. More efficient than Dijkstra when good heuristic exists. Used in games, robotics, navigation.