Rate limiting in Laravel controls how many requests a user can make in a set time. When a request arrives, Laravel checks if the user has made too many requests recently. If the user is within the limit, the request is allowed and counted. If the user exceeds the limit, Laravel rejects the request with a 429 Too Many Requests error. The count resets after the time window passes, allowing new requests. This protects your app from too many requests at once. The example code uses 'throttle:3,1' to allow 3 requests per 1 minute. The execution table shows requests 1 to 3 succeed, request 4 and 5 are rejected, and after 1 minute the count resets and requests succeed again.