A load balancer functions in network traffic management by distributing incoming network requests to multiple servers. This process ensures that no single server is overwhelmed, improving both the performance and availability of applications. By intelligently directing traffic based on server load, health checks, and response times, load balancers enhance user experience by decreasing latency and increasing throughput. They also provide redundancy, allowing for continuous service in the event of server failures, thereby contributing to a more reliable and efficient network infrastructure.