Content compression reduces the size of data transferred between the server and clients, resulting in improved performance and reduced bandwidth usage. In ASP.NET Core Web API, you can implement content compression by enabling compression middleware, such as Gzip or Deflate. These middleware compress the response content before sending it to the client, and the client's browser automatically decompresses it. By compressing text-based content, such as JSON or XML, you can significantly reduce the response size and improve the overall performance of your Web API.