File handling in Python allows programs to work with files stored on disk by performing operations like opening, reading, writing, and modifying files. The open() function is used to open a file and return a file object, which can then be used to read or write to the file. There are different file access modes like 'r' for read-only, 'w' for write-only, and 'a' for append. Common methods for reading files include read() to read characters, readline() to read one line, and readlines() to read all lines into a list. Files can be written to using write() and writelines() methods and deleted using functions in the os, shutil, or pathlib modules.