Ngrok is a tool used in the tutorial to generate temporary public URLs for development web servers, allowing Twilio services to reach them. Pyngrok, a Python wrapper for ngrok, automates the process of creating and updating these URLs within Python applications. The tutorial demonstrates how to integrate pyngrok into a Flask application, which creates an ngrok tunnel and updates the Twilio webhook with the assigned URL automatically. This automation streamlines the development process by eliminating manual configuration steps.