The Reflection API in Java is a powerful feature that allows developers to inspect and manipulate the runtime behavior of applications. It enables the examination of classes, interfaces, fields, and methods without knowing their names at compile time. This dynamic capability is particularly useful for tasks such as debugging, testing, and creating extensible applications. However, it is important to note that while reflection provides significant flexibility, it can also lead to performance overhead, as certain optimizations by the Java Virtual Machine may not be applicable. Therefore, it should be used judiciously in performance-sensitive applications.