In Django, STATIC_URL is the web address prefix used by browsers to request static files like images or CSS. STATICFILES_DIRS is a list of folders on your computer where Django looks for these static files during development. When you set STATIC_URL to '/static/', the browser will request files starting with this path. STATICFILES_DIRS might include a folder like 'assets' where your static files live. When the browser asks for '/static/logo.png', Django searches the folders in STATICFILES_DIRS for 'logo.png'. If found, Django serves the file. If not, a 404 error is returned. For production, you run 'collectstatic' to gather all static files into STATIC_ROOT, and the web server serves them from there using STATIC_URL as the prefix. This setup helps keep static files organized and accessible both during development and in production.