Debugging in Selenium WebDriver is a critical skill for automation engineers, especially when dealing with complex test suites. The process involves using breakpoints to pause execution at strategic points in the code to closely examine the state and behavior of the application, helping to identify and fix issues. Breakpoints can be set in IDEs like Eclipse and IntelliJ, allowing developers to inspect variable values and control execution flow, making debugging more efficient. The guide highlights methods for inserting and managing breakpoints, running code in debug mode, and understanding code execution through various debugging features. By leveraging these techniques, developers can effectively troubleshoot faults in Selenium WebDriver scripts, ultimately enhancing test reliability and performance.