L1 and L2 regularization are techniques to prevent overfitting in machine learning models. L1 regularization adds a penalty term to the loss function based on the absolute values of the model's parameters, encouraging sparsity. L2 regularization uses the squared values instead, which does not induce sparsity but helps prevent overfitting by keeping parameter values small. The degree of regularization is controlled by the hyperparameter lambda. L1 regularization is useful for feature selection with high-dimensional data, while L2 regularization produces simpler, more robust models.