Python functions are essential building blocks in programming that allow developers to encapsulate code into reusable blocks. A function is defined using the def keyword, followed by a name and parentheses that may include parameters. Functions can perform specific tasks, take inputs, and return outputs, making code more organized and manageable. They help reduce redundancy by allowing the same code to be executed multiple times with different inputs. Python provides both built-in functions, like print(), and the ability to create user-defined functions, enhancing the flexibility and efficiency of coding in Python.