Cybersquatting (also known as domain squatting), according to the United States federal law known as the Anticybersquatting Consumer Protection Act, is registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. The cybersquatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.

The term is derived from "squatting," which is the act of occupying an abandoned or unoccupied space or building that the squatter does not own, rent or otherwise have permission to use. Cybersquatting however, is a bit different in that the domain names that are being "squatted" are (sometimes but not always) being paid for through the registration process by the cybersquatters. Cybersquatters usually ask for prices far greater than that at which they purchased it. Some cybersquatters put up derogatory remarks about the person or company the domain is meant to represent in an effort to encourage the subject to buy the domain from them. Others post paid links via Google, Yahoo, Ask.com and other paid advertising networks to the actual site that the user likely wanted, thus monetizing their squatting. As with many controversial issues, some argue that the dividing line of cybersquatting is difficult to draw, or that the practice is consistent with a capitalistic and free market ethos.

Cybersquatting is one of the most loosely used terms related to domain name intellectual property law and is often incorrectly used to refer to the sale or purchase of generic domain names such as example.com.