Python environments are isolated spaces that allow developers to manage dependencies and packages for different projects without conflicts. They enable the installation of specific versions of libraries tailored to each project, ensuring that changes in one environment do not affect others. This is particularly useful in Python, where multiple projects may require different versions of the same package. Common tools for creating and managing these environments include venv, virtualenv, and conda. By utilizing Python environments, developers can maintain cleaner, more organized workflows and avoid the common pitfalls associated with package management.