Vertical Fragmentation is a database design technique where a single table is divided into multiple smaller tables, each containing a subset of the original table's columns. This approach allows for more efficient data management and can improve performance by reducing the amount of data processed during queries. In Vertical Fragmentation, each smaller table can be stored on different servers or locations, optimizing resource usage. This method is particularly useful in distributed database systems, where it helps in minimizing data transfer and enhancing access speed for specific data attributes, ultimately leading to better overall system performance.