TCP handles data fragmentation by breaking down the data into smaller segments called packets. These packets are then transmitted separately over the network and reassembled by the receiving end to reconstruct the original data. TCP uses a process called segmentation to break down the data into packets of a specific size that can be transmitted efficiently over the network. This allows the TCP protocol to handle the transmission of large amounts of data without experiencing data loss or corruption due to network congestion or errors. Additionally, TCP implements a technique called sequence numbering to ensure that packets arrive in the correct order and retransmits any lost or corrupted packets to ensure data integrity.