To process multipart/form-data inside a Netlify Function, you can use a high-performance parser like busboy, which is also used internally by popular Express package multer. The parsing logic involves setting up handlers for file and normal fields, as well as the finish event to resolve the promise with the resulted fields. This allows you to extract form values, including files, from Netlify Function events in a convenient and efficient manner. By using busboy, you can simplify the process of handling multipart/form-data encoding in your serverless functions.