Smart folders are virtual containers that automatically group files or content based on defined search criteria (rules), rather than a fixed physical location. Unlike regular folders where you manually place items, a smart folder acts as a saved search; it displays items matching your rules in real-time, regardless of where those files are actually stored on your system or within an application. Setting one up involves defining search parameters such as keywords, dates, tags, or file types.

For example, in macOS Finder, you can create a smart folder by performing a search (e.g., for files containing "Budget" or meeting minutes), then clicking "Save" to store that search as a dynamic folder. Similarly, email clients like Outlook allow creating search folders based on sender, subject, flagged status, or other rules to automatically organize incoming messages into a virtual view. These are widely used by professionals managing large collections of documents, photos, emails, or media files.

The major advantage is efficiency: smart folders save significant time by automatically collecting relevant items from scattered locations, reducing manual sorting. However, their reliance on consistent metadata or naming conventions is a limitation; files lacking the required attributes won't appear. This dynamic approach fosters better organization and workflow, encouraging users to rely on logical searches rather than complex folder structures, driving broader adoption of search-driven file management.