Vue 3's Composition API provides flexible component logic organization. setup() function runs before component creation. ref creates reactive primitive values with .value access. reactive creates reactive objects with deep reactivity. computed creates cached derived values. watch and watchEffect trigger side effects on reactive changes. Lifecycle hooks use onMounted, onUpdated, onUnmounted prefixes. provide and inject share data across component hierarchy. Composables encapsulate and logic. script setup syntax reduces boilerplate for single-file components. TypeScript integration is excellent with defineComponent. Teleport renders content outside component DOM hierarchy. Suspense handles async component dependencies. Fragments allow multiple root elements. Portals render content in different DOM locations. Reactivity system uses Proxy for more efficient change detection. Performance improvements include tree-shaking support. Migration from Options API is incremental. Vue 3 combines the best of React hooks and Angular patterns. Composition API scales from simple to complex applications.