In German grammar, the Subjunctive mood (Konjunktiv) is used to express hypothetical situations, indirect speech, politeness, and speculation. It comes in two forms majorly, Subjunctive I (Konjunktiv I) for reporting indirect speech, and Subjunctive II (Konjunktiv II) for unreal or hypothetical situations. Mastery of this mood in German is crucial for proficient and nuanced communication.