What are generators in Python and when should you use them?

Generators are functions that yield values one at a time, maintaining state between calls, using lazy evaluation. Created with 'yield' keyword or generator expressions (x for x in range(n)). Benefits: memory efficient (values generated on demand, not stored), infinite sequences possible, pipeline composition. Use when: processing large files line by line, streaming data, when you don't need all values at once. Methods: __next__(), send(), throw(), close(). Example: reading million-line file without loading entire file. Generators are iterators with simpler syntax.