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That StackOverflow answer so far is the best one I have ever seen:

This is an excellent video on youtube which demonstrates how these interfaces differ, worth a watch.

Below goes a long descriptive answer to it.

The first important point to remember is IQueryable interface inherits from IEnumerable, so whatever IEnumerable can do, IQueryable can also do.

There are many differences but let us discuss the one big difference which makes the biggest difference. IEnumerable interface is useful when your collection is loaded using LINQ or Entity framework and you want to apply filter on the collection.

Consider the below simple code which uses IEnumerable with entity framework. It’s using a Where filter to get records whose EmpId is 2.

EmpEntities ent = new EmpEntities();
IEnumerable<Employee> emp = ent.Employees; 
IEnumerable<Employee> temp = emp.Where(x => x.Empid == 2).ToList<Employee>();

This is where the filter is executed on the client side where the IEnumerable code is. In other words, all the data is fetched from the database, and then at the client, it scans and gets the record with EmpId is 2.

But now see the below code we have changed IEnumerable to IQueryable. It creates a SQL Query on the server side and only necessary data is sent to the client side.

EmpEntities ent = new EmpEntities();
IQueryable<Employee> emp = ent.Employees;
IQueryable<Employee> temp =  emp.Where(x => x.Empid == 2).ToList<Employee>();

So the difference between IQueryable and IEnumerable is about where the filter logic is executed. One executes on the client side and the other executes on the database.

So if you working with only in-memory data collection IEnumerable is a good choice but if you want to query data collection which is connected to a database IQueryable is a better choice as it reduces network traffic and uses the power of SQL language.

Thanks, Shivprasad Koirala for such an amazing answer.