Layered navigation in Magento is used to narrow down search results for a product using their attributes. It makes use of attributes such as product category, price, color, material, pattern etc, or a combination of such filters.
Layered navigation appears on the left sidebar of Magento store’s category or product pages. Attributes are listed in an expandable section where users can select the attribute they want to Shop By. By default, Magento shows products which are filtered by buyer search. But there is an option in Magento to allow showing products which don’t match the search results.
For example of, if a buyer chooses Mens/Tshirts category from the top navigation, initially all t-shirt products will be shown under Men’s category. The buyer can then filter down his search to, for example, black round neck t-shirts or polo t-shirts of size XL etc.
Layered Navigation can only be used when categories are anchored. What this means is when parent categories can show products from child categories. Product input types combined with attribute properties determine which product attributes are used for layered navigation.