Vapor pressure deficit (VPD) is the difference between the amount of water vapour in the air and how much water the air can hold when it is saturated. It takes into account the effect of temperature on the water holding capacity of the air, which roughly increases with temperature. Therefore, calculation of VPD is more interesting than relative humidity (RH) alone.
Vapor pressure is a measurement of how much water vapor is present in the air. More water vapor in the air means greater water vapor pressure. The maximum water vapor content in given temperature in the air is called the saturation vapor pressure (also known as dew point), which is directly related to temperature. The mathematical definition of VPD is the difference between the saturation vapor pressure and the actual air vapor pressure.
Higher VPD means the air is low and that the air has a higher capacity to hold water, stimulating transpiration i.e. increasing the transpirational demand and influencing how much moisture from plant tissues is transferred into the atmosphere. Lower VPD means high humidity i.e. the air is near saturation, so the air cannot include more moisture from leaves.