Pagination in Django is a crucial mechanism for breaking down large datasets or search results into manageable, navigable chunks, enhancing the user experience of web applications. It allows users to view a subset of data per page, reducing load times and clutter. To implement pagination, developers use built-in Django functionalities like Pagination, Page, and template tags such as {% for %} and {% if %}. They define page sizes, calculate total pages, and provide navigation controls to move between pages effortlessly. Pagination improves website performance, ensuring that web applications remain responsive and user-friendly, ultimately leading to enhanced user engagement and satisfaction.