Caching is the process of storing data in memory, typically for a limited period, so that it can be quickly retrieved when needed instead of fetching it again from its original source. In Django REST Framework (DRF), caching is a technique used to store the results of expensive database queries, computations, or entire API responses temporarily, so subsequent requests for the same data can be served faster. By caching data, DRF reduces database load, improves response times, and enhances overall application performance, especially in read-heavy applications.