Test-driven development (TDD) is a key practice in extreme programming (XP) that ensures the quality of code by defining the test pass criteria before any code is written. In TDD, developers write automated test cases before writing the actual code. These tests specify what the code should do and serve as a guide for development. The process follows a cycle of writing a test, running it to see it fail (since the code hasn't been written yet), writing the minimum code necessary to pass the test, and then refactoring the code while ensuring the test still passes. This approach helps ensure that code meets the required specifications from the outset and encourages writing only the necessary code to pass tests, leading to higher quality and more maintainable code. References for TDD practices can be found in books like "Test-Driven Development: By Example" by Kent Beck.