When React renders JSX, it looks for curly braces {} which indicate JavaScript expressions. It evaluates these expressions and replaces them with their values in the output. For example, if a variable 'name' holds 'Alice', then <h1>Hello, {name}!</h1> becomes <h1>Hello, Alice!</h1>. This process happens step-by-step: React starts rendering, finds the expression, evaluates it, replaces it, and continues rendering until complete. Expressions can be any JavaScript code that returns a renderable value. If the expression is null or undefined, React simply renders nothing in that spot. This allows dynamic content inside JSX easily and clearly.