PEP 750 introduces template strings to Python, a generalization of f-strings that allows for more flexible string processing. Template strings are defined using the 't' prefix and evaluate to a new type, Template, which provides access to the string and its interpolated values. This feature enables safety checks, web templating, and domain-specific languages. The Template type has attributes such as 'strings' and 'interpolations' that can be used to process the template.