A prodrug is a pharmacological substance (drug) which is administered in an inactive (or significantly less active) form. Once administered, the prodrug is metabolised in the body (in vivo) into the active compound.
The rationale behind the use of a prodrug is generally for ADME optimisation. Prodrugs are usually designed to improve oral bioavailability - poor absorption from the gastrointestinal tract is usually the limiting-factor, and is often due to the chemical properties of the drug.
In rational drug design, the knowledge of chemical properties likely to improve absorption and the major metabolic pathways in the body allows the modification of the structure of new chemical entities for improved bioavailability. However, sometimes the use of a prodrug is unintentional, especially in the case of serendipitous drug discoveries, and the drug is only identified as a prodrug after extensive drug metabolism studies.