The Couchbase sub-document API allows developers to read and write only parts of a document rather than the full document, which is beneficial for transferring large documents between the application layer and Couchbase Server. This can be achieved using the Node.js SDK for Couchbase, where developers can create functions such as `createDocument`, `getSubDocument`, `upsertSubDocument`, and `getDocument` to manipulate specific parts of a document. The sub-document API enables efficient data management by reducing the transfer size of documents and allowing developers to update only specific properties without obtaining the full document first.