The `format()` method in Python is used to format strings by inserting values into placeholders defined by curly braces `{}`. This allows for dynamic string creation, making it easier to construct messages or display data. For example, you can use `format()` to include variables in a sentence, enhancing readability and maintainability of the code. You can also specify formatting options within the curly braces, such as alignment, width, and number formatting. This flexibility makes `format()` a powerful tool for creating well-structured output. Overall, it simplifies the process of string manipulation in Python programming.