Functions are fundamental building blocks in programming that allow developers to encapsulate a set of instructions into a reusable unit. By defining a function, programmers can execute a specific task or calculation multiple times throughout their code without rewriting the same statements. Functions enhance code readability and maintainability, making it easier to manage complex programs. They can accept inputs, known as parameters, and return outputs, enabling dynamic and flexible operations. In various programming languages, functions are defined using specific syntax, such as the def keyword in Python or the function keyword in JavaScript, showcasing their versatility across different environments.