Mob spawn limits control how many mobs of each type can exist around players at once. Lowering them can reduce lag, and raising them gives busier worlds or bigger farms. This works on Paper and its forks.

1. Stop the server and open the Files tab.
2. Open bukkit.yml.
3. Find the spawn-limits section:

spawn-limits:
  monsters: 70
  animals: 10
  water-animals: 5
  water-ambient: 20
  ambient: 15

4. Change the numbers. Smaller means fewer mobs.
5. Save the file and restart the server.

You can also raise the ticks-per values in the same file so spawn attempts happen less often, which helps performance. Paper also has per-world spawn settings in config/paper-world-defaults.yml.

If your server is laggy, see Optimization and Spark to find the real cause before changing limits.