The ElGamal encryption algorithm is a public key encryption algorithm that is based on the Diffie-Hellman key exchange. It uses a cyclic group of integers modulo a prime number and the discrete logarithm problem for encryption and decryption. The sender generates a public key and a private key, and uses the private key to encrypt the message. The receiver then uses the sender's public key to decrypt the message, and veryify the identity of the user, thus acting as a digital siganture. ElGamal encryption is used for secure communications and is also used in digital signatures and other cryptographic applications.