1. Pluggable Authentication Modules. A suite of shared libraries that determine how a user will be authenticated. For example, conventionally UNIX users authenticate themselves by supplying a password at the password prompt after they have typed their name at the login prompt. In many circumstances, such as internal access to workstations, this simple form of authentication is considered sufficient. In other cases, more information is warranted. If a user wants to log in to an internal system from an external source, like the Internet, more or alternative information may be required, perhaps a one-time password. PAM provides this type of capability and much more. Most important, PAM modules allow you to configure your environment with the necessary level of security. From Linux System Security

2. PAM (Pluggable Authentication Modules) is a system security tool which allows system administrators to set authentication policy without having to recompile programs which do authentication. From Mandrake 9.0 RPM