Frequency modulation (FM) involves varying the frequency of a carrier wave based on the instantaneous amplitude of a modulating signal. FM provides improved signal-to-noise ratio and less interference between stations compared to amplitude modulation, but uses much more bandwidth and requires more complex transmitter and receiver circuits. The document discusses modulation index, frequency deviation, Carson's bandwidth rule for FM signals, and includes a circuit diagram for a frequency modulator and demodulator that is used to generate and recover a message signal.