IP Address Management (IPAM) in Windows Server automates and centralizes the management of IP address infrastructure, allowing administrators to monitor, manage, and audit DHCP and DNS servers. Setting up IPAM involves several steps: verifying prerequisites (supported Windows Server version, active directory domain, and operational DHCP/DNS roles), installing IPAM through Server Manager or command prompt, configuring IPAM for file sharing and access settings, configuring server discovery, and managing servers and settings. To add an IP address to IPAM, users access the IPAM console, navigate to the IP Address Space section, select the desired IP Address block, and provide necessary details before saving the changes.