Tree-shaking in Angular is a technique that minimizes the build output by eliminating unused code, thus reducing the final size of the application. By using this method, only the necessary parts of the codebase are included in the production build. Additionally, Angular's newer features like standalone components allow for more granular imports, further optimizing the tree-shaking process. Cleaning up unused imports and using build budgets can also help keep the application size under control, ensuring better performance for users.