A small Java application that is downloaded by an ActiveX or Java-enabled web browser. Once it has been downloaded, the applet will run on the user's computer. Common applets include financial calculators and web drawing programs.

An applet is a Java program that can be embedded into a web page. It runs inside the web browser and works at client side. An applet is embedded in an HTML page using the APPLET or OBJECT tag and hosted on a web server.

Important points :

All applets are sub-classes (either directly or indirectly) of java.applet.Applet class.
Applets are not stand-alone programs. Instead, they run within either a web browser or an applet viewer. JDK provides a standard applet viewer tool called applet viewer.
In general, execution of an applet does not begin at main() method.
Output of an applet window is not performed by System.out.println(). Rather it is handled with various AWT methods, such as drawString().