HTML encoding is a process that converts special characters into a format that can be safely displayed in web browsers. This is important because certain characters, like <, >, and &, have specific meanings in HTML. By encoding these characters, we ensure that they are interpreted as text rather than HTML code. For example, the less-than sign (<) is encoded as &lt; and the greater-than sign (>) as &gt;. This prevents browsers from misinterpreting them, allowing developers to display code snippets or special symbols correctly. HTML encoding helps maintain the integrity of web content and enhances user experience.