In Unity, Update() is called once per frame and is used for tasks like input handling and non-physics-related updates. FixedUpdate() is called at fixed intervals and is ideal for handling physics calculations and applying forces, ensuring consistent results regardless of frame rate. LateUpdate() is called after all Update() methods have been executed, making it suitable for camera movements or actions that depend on the results of the previous frame's updates. Understanding these differences helps optimize performance and ensure smooth gameplay.