For some stores, on the category pages you will want your customers to be able to filter products based on different attributes. Magento calls this Layered Navigation. Well, at least they do in the layout code and in documentation.
However, when it comes to actually enabling this setting they decided to call it something different in the administration interface to confuse us. We’re not going to let a little obfuscation deny us some of the beauty of Magento though, oh no!
You can pick and choose for each category whether you’d like to enable the layered navigation. Under the Display Settings tab for a category, change the Is Anchor setting to Yes. That category will now have filter functionality.