Type inference is TypeScript's ability to automatically determine types without explicit type annotations. The compiler analyzes the code and infers the most appropriate types.

let message = "Hello"; // TypeScript infers string type
let count = 42; // TypeScript infers number type
let isActive = true; // TypeScript infers boolean type

function add(a: number, b: number) {
  return a + b; // Return type inferred as number
}