What is the significance of using enctype="multipart/form-data" in a form when uploading files in PHP?

When uploading files in PHP, using enctype="multipart/form-data" in a form is significant because it allows the form data to be encoded as "multipart" which is necessary for uploading files. Without this encoding type, the file data will not be properly transmitted to the server.

<form action="upload.php" method="post" enctype="multipart/form-data">
    <input type="file" name="file">
    <input type="submit" value="Upload">
</form>