Laravel Livewire enables the creation of dynamic interfaces by leveraging AJAX requests to update the server when user interactions occur. By utilizing a library such as MySQL for data storage, developers can build reactive and dynamic interfaces using Blade templating engine. The tutorial demonstrates how to create a live search box with Laravel Livewire and MySQL, allowing users to input search queries and retrieve relevant results from a database. It covers key aspects of the project, including setting up the necessary dependencies, configuring the database for FULLTEXT indexes, creating a Search trait, and integrating it into the User model class. The tutorial also provides an example of how to create a Livewire component that interacts with the database and renders search results in a user-friendly manner.