The brain is a highly efficient system evolved to achieve high performance with limited resources. We propose that dendrites make information processing and storage in the brain more efficient through the segregation of inputs and their conditional integration via nonlinear events, the compartmentalization of activity and plasticity and the binding of information through synapse clustering. In real-world scenarios with limited energy and space, dendrites help biological networks process natural stimuli on behavioral timescales, perform the inference process on those stimuli in a context-specific manner, and store the information in overlapping populations of neurons. A global picture starts to emerge, in which dendrites help the brain achieve efficiency through a combination of optimization strategies balancing the tradeoff between performance and resource utilization.