Constant folding is an optimization technique used in programming languages and compilers. It simplifies constant expressions at compile time rather than at runtime. For example, if a program contains an expression like 2 + 3, the compiler can evaluate this to 5 before the program runs, reducing the amount of computation needed during execution. This process helps improve performance by decreasing the number of calculations the program must perform while it runs. By handling these constant expressions ahead of time, constant folding allows for faster execution and more efficient use of resources, ultimately leading to better overall program performance.