The io.netty.handler.timeout.ReadTimeoutException in Java is a runtime exception thrown within the Netty framework when a read operation exceeds the designated timeout period. This exception is typically triggered by the ReadTimeoutHandler in scenarios such as server delays in processing requests, network transmission issues, or client processing delays. An example involving a slow server that takes 10 seconds to respond demonstrates how this exception can occur when a client set with a 1-second read timeout attempts to connect. Handling the exception involves creating a custom handler to manage the error using the ChannelInboundHandlerAdapter.exceptionCaught() method, which allows for printing the stack trace and closing the connection gracefully. To prevent this exception, developers can increase the read timeout period, check for network issues, or optimize server-side performance. Additionally, tools like Rollbar provide automated error monitoring and triaging, simplifying the management of Java errors in production environments.