A 'too many open files' error occurs when your Node.js app tries to open more file descriptors than allowed by the operating system. This usually happens when file resources like streams, sockets, or file handles aren't being closed properly, leading to file descriptor leaks. To avoid this, ensure you’re properly closing files and other I/O resources when they’re no longer needed, either manually or using the `finally` block in a `try/catch` statement. You can also increase the OS’s file descriptor limit using `ulimit` on Linux or macOS. Using connection pools for database connections or file I/O can also prevent this issue by managing resources more efficiently. Properly managing your file descriptors ensures your app runs smoothly without crashing due to system limits.