The significance of internet protocol security (IPSec) lies in its capability to secure Internet Protocol (IP) communications by ensuring data integrity, confidentiality, and authenticity. IPSec functions by encrypting and authenticating data packets transferred across a network, providing protection against interception and tampering. This technology is crucial for establishing Virtual Private Networks (VPNs) and secure communication channels over public networks. By deploying IPSec, organizations can protect sensitive information and maintain secure connections between remote users and corporate resources, thereby enhancing data security.