Java AWT (Abstract Windowing Toolkit) is an API for developing GUI applications in Java. It contains components like buttons, text fields, labels etc. that are platform-dependent and heavyweight. The AWT hierarchy includes containers like Frame and Panel that can hold other components. Common methods like add(), setSize() and setLayout() are used to manage components. Event handling in AWT involves implementing listener interfaces, registering components with listeners, and placing event code in the same class, a separate class, or anonymously.