Retrieval-Augmented Generation (RAG) merges retrieval-based models, which fetch relevant information from a database, with generation-based models like GPT, which generate text. It begins by retrieving pertinent documents based on a query. Then, it uses this retrieved information alongside the query to produce a response. This fusion allows RAG to provide accurate, diverse, and contextually appropriate responses, making it effective for tasks like question answering and content generation.