Vim's folding feature can fold code blocks, functions, comments, etc., making code clearer and easier to read. Folding methods: zf to create fold, zo to open fold, zc to close fold, za to toggle fold state, zA to recursively toggle all folds, zR to open all folds, zM to close all folds. Folding methods: :set foldmethod=manual for manual folding, indent for indentation-based folding, expr for expression-based folding, syntax for syntax-based folding, diff for diff-based folding, marker for marker-based folding. Common settings: :set foldlevel=0 to set fold level, :set foldcolumn to show fold column. Folding commands: zd to delete fold, zD to recursively delete fold, zE to delete all folds. Folding is particularly useful for reading large files, allowing quick navigation to code sections of interest and reducing visual distraction. Mastering the folding feature can significantly improve code reading efficiency.