The 8 Puzzle Problem in AI involves arranging numbered tiles on a 3x3 grid to achieve a specific goal configuration, usually in ascending order with the blank space at the bottom right. It is a classic example of a state space problem, where each tile move represents a state transition. Solving the puzzle requires searching through possible states using algorithms like A*, which utilizes heuristics such as the Manhattan distance to prioritize moves that bring the current state closer to the goal state. The problem demonstrates concepts of heuristic search, state space representation, and problem-solving in artificial intelligence.