Controllers in Laravel handle HTTP requests and generate responses. They contain methods corresponding to different HTTP verbs and actions to perform in response to those requests. When a request is made, the routing system determines which controller and method to handle it based on the URI and HTTP verb. The method performs the necessary actions and returns a response, such as a view, JSON data, or redirect. Controllers are located in the "app/Http/Controllers" directory and can be created using the "php artisan make:controller" command. Laravel provides features for common tasks like validation, authentication, and authorization that can be integrated into controller methods.