Memory leaks in Node.js can severely degrade performance over time. These leaks occur when an application unintentionally retains references to objects, preventing them from being garbage collected. Common causes include global variables, long-running event listeners, unclosed database connections, and circular references in objects. To identify memory leaks, you can use Node.js's built-in tools like the `–inspect` flag, which allows you to use Chrome DevTools to take heap snapshots and analyze memory usage. Other tools like `memwatch-next` and `heapdump` can help track memory allocations and potential leaks. Fixing memory leaks often involves refactoring code to avoid keeping unnecessary references alive. In critical applications, setting up alerts for abnormal memory growth can help catch leaks before they become problematic.