Greedy algorithms build a solution incrementally by choosing the best option at each step. Dijkstra's algorithm uses a greedy approach to find the shortest path between vertices in a graph. It works by maintaining the shortest known path to each vertex, starting from the source vertex. At each step, it examines the neighbors of the vertex with the shortest path and updates their shortest path if a better option is found through this vertex. This process continues until all vertices are visited. The time complexity of Dijkstra's algorithm is O(E log V) where E is the number of edges and V is the number of vertices.