Multi-tenancy in Kubernetes allows multiple users to share a single infrastructure resource, improving cost efficiency and ease of management. Implementing multi-tenancy correctly requires isolating resources with Namespaces, RBAC, Network Policies, and Resource Quotas to prevent cross-tenant access and ensure fair distribution of resources. A dedicated virtual cluster tool like vCluster can provide tenants with their own private clusters, while external tools like Spacelift automate cluster provisioning and management processes. Multi-tenancy improves operational efficiency by letting multiple customers, apps, or environments use one Kubernetes cluster, but it requires careful configuration to mitigate security risks.