A Fragmentation Threshold is the maximum data fragment size that can be sent in a wireless network before the AP fragments the packet into smaller data frames.

The maximum size for directed data packets transmitted over the radio. Larger frames fragment into several packets this size or smaller before transmission over the radio. The receiving station reassembles the transmitted fragments.

One of the settings on an access point (don't mess with unless you know what you're doing!), fragmentation is the process of splitting data into packets for transmission. When the amount of data to be transmitted exceeds the threshold, then it will be transmitted in two packets instead of one. Because each packet has its own header and demands a complete program cycle to be processed, smaller packets demand more computing resources for a given amount of data, i.e. are less efficient. However, smaller packets can be communicated with greater reliability because they present fewer opportunities for transmission errors. Thus, where there is strong radio interference or other causes for poor communication, it may be necessary to reduce the fragmentation threshold to achieve acceptable communication.