A TXT (text) record stores text information, allowing you to provide information to sources outside of your domain. This record can hold virtually any text – in human or machine readable format. Each TXT record has a hostname, allowing you to assign the text to a specific hostname/zone. Every DNS zone file can hold multiple TXT records.
The most common use of a TXT record is to store SPF (sender policy framework) records, which prevent emails being faked to appear to have been sent from your domain. Please see below for further information on SPF records.
Another common use of TXT records is verification. Both Microsoft Office 365 and Google Apps will require a TXT record to be added to your DNS for verification before you can use their services.
All text within a TXT record should be enclosed in quotation marks.