Streaming responses in FastAPI let the server send data bit by bit instead of all at once. When a client requests the streaming endpoint, the server starts a generator that yields small pieces of data. Each chunk is sent immediately to the client, who can start processing it right away. This continues until the generator finishes yielding all chunks. Then the server closes the connection. This method is helpful when sending large files or data that takes time to prepare. The example code shows a generator yielding three text chunks. The execution table traces each step: starting the generator, yielding chunks, client receiving them, and closing the connection. Variables like the loop index 'i' update with each yield. Understanding this flow helps beginners see how streaming responses work in FastAPI.