Molecular orbitals (MOs) are formed by the linear combination of atomic orbitals (AOs) when atoms combine to form molecules. These orbitals can be bonding, anti-bonding, or non-bonding, depending on the phase relationship of the combining atomic orbitals. Bonding orbitals result in electron density between nuclei, stabilizing the molecule, while anti-bonding orbitals have nodes between nuclei, leading to destabilization.