A documentation tool in software is a software application designed to create, maintain, and manage technical documentation. Such tools facilitate the organization of product information, user guides, and system specifications. They can support formats like markdown, HTML, or traditional document types. Examples include Confluence, Read the Docs, and GitBook. Effective documentation is vital for software development, as it aids in knowledge sharing, enhances collaboration among teams, and serves as a reference for future maintenance and updates, ultimately leading to improved software quality.