The psycopg2 module is a PostgreSQL adapter for Python, commonly used in applications requiring database interactions.When deploying applications using psycopg2 to AWS Lambda, it needs to be packaged as a Lambda layer.To fix the 'No Module Named psycopg2' error in AWS Lambda, a psycopg2 Lambda layer needs to be created.By following the steps mentioned in the article, the psycopg2 'ModuleNotFoundError' issue can be resolved in AWS Lambda.