In Java programming, variables and data types are fundamental concepts that play a crucial role in storing and manipulating data. A variable acts as a named memory location that holds a value, allowing developers to reuse and manage data efficiently throughout their code. Java supports various data types, which can be broadly categorized into primitive and reference types. Primitive data types include integers, floating-point numbers, characters, and booleans, while reference types are used to store references to objects. Understanding how to declare, initialize, and utilize variables and data types is essential for writing effective and scalable Java applications.