Ethereum Virtual Machine (EVM)
In short: The Ethereum Virtual Machine (EVM) is the "Turing complete" virtual machine that provides the working environment for each smart contract on Ethereum.
The Ethereum Virtual Machine (EVM) is the "Turing complete" virtual machine that provides the working environment for each smart contract on Ethereum. It ensures that the code developers deploy is executed as intended, in exactly the same way on every node of the network.
Why it matters
Developers write smart contracts in languages such as Solidity or Vyper and compile them into bytecode that the EVM runs. Every full node executes the same bytecode with the same inputs and must reach the same result. This is how the network agrees on balances and contract state without trusting a single server. "Turing complete" means the EVM can, in principle, run any program. In practice every operation costs gas and every transaction has a gas limit, so a program cannot loop forever and clog the network. Many other blockchains are EVM-compatible: they run the same kind of bytecode and use the same 0x address format. That helps developers reuse code, but it is also why exchanges ask you to choose the correct network when you deposit or withdraw.
Example
A developer writes a token contract in Solidity, compiles it and deploys the bytecode to Ethereum. When a user later calls the contract's transfer function, the EVM on each node runs that same code, checks the sender's balance and updates both balances. If the code hits an error or runs out of gas, the EVM reverts the changes.