Sparse indexes in MongoDB work by including only those documents that have the indexed field. When you create a sparse index, MongoDB checks each document in the collection. If the document has the field you want to index, it adds it to the index. If the document does not have that field, it skips it. This means the index is smaller and faster for queries that involve that field. For example, if you create a sparse index on the 'email' field, only documents with an 'email' will be in the index. Documents without 'email' are not indexed. This behavior is shown step-by-step in the execution table, where documents with and without the 'email' field are processed. Sparse indexes also include documents where the field exists but is null. This is important to remember. Sparse indexes are useful when the field is optional and not present in every document.