AWS Lambda logging allows developers to capture and store information about the execution of functions in AWS Lambda, providing visibility into behavior, performance, and errors. It integrates with Amazon CloudWatch Logs, a scalable log storage service, and enables features such as logging libraries, logging levels, custom metrics, and retrieval and analysis tools. However, sending logs to CloudWatch can incur fees after exceeding the free tier limits, especially for frequently invoked functions producing moderate quantities of log data. To mitigate this, AWS Lambda Extensions now have direct access to the log stream, independent from CloudWatch, allowing developers to send function logs directly to New Relic's Telemetry Data Platform, gaining unified visibility into their Lambda functions and reducing cloud spend. Effective logging is crucial for monitoring and troubleshooting AWS Lambda functions, and best practices include using logging libraries, including sufficient information, handling errors appropriately, monitoring cold starts, and regularly reviewing and analyzing logs.