Handlers in AmigaOS are software modules that manage input/output operations between the operating system and physical devices or virtual file systems. They act as translators, converting high-level DOS commands into device-specific instructions, allowing uniform access to diverse hardware like floppy drives, hard disks, serial ports, and RAM disks. File System Handlers such as FFS (Fast File System) or SFS (Smart File System) manage disk storage, while Device Handlers manage hardware peripherals, both running as separate processes that communicate via Exec message passing.