Caching in ASP.NET Core Web API can significantly improve performance and reduce the load on resources. You can implement caching by using the ResponseCaching middleware, which enables server-side caching of responses. By adding cache-related headers to the API responses, you instruct client-side caches and intermediate proxies to cache the responses. Additionally, you can use the MemoryCache or distributed caching providers like Redis to cache data within the application. Caching can be applied at various levels, such as per-action, per-controller, or per-application, based on the specific caching requirements of your Web API.