The Pythagorean theorem states that for any right triangle, the square of the hypotenuse is equal to the sum of the squares of the other two sides. The document explains this theorem using diagrams of squares constructed from right triangles. It shows that the total area of two smaller squares formed from the legs of the triangles equals the area of the single larger square formed from the hypotenuse. This demonstrates algebraically that a^2 + b^2 = c^2, where a and b are the legs and c is the hypotenuse.