Lookup filters on relationship fields
Key Takeaway
A lookup filter limits which records users can pick in a relationship field. In Lightning Experience, all lookup filters are required, so users can't save a value that doesn't meet the criteria.
A lookup filter is a rule on a relationship field, such as a lookup or master-detail field, that limits which records users can pick. It narrows the search results in the lookup dialog to records that meet your criteria. When the filter is required, it also stops users from saving a value that doesn't match. App builders use lookup filters to enforce simple business rules about which records can be linked together.
What a lookup filter controls
A lookup filter sits on a relationship field and controls two things: which target records are valid values, and which ones appear in the lookup dialog. Lookup filters aren't available on external lookup relationship fields.
For example, the Account Name field on opportunities can allow only accounts with a Customer Account record type. In the same way, a Job Application's lookup to Position can allow only positions whose Status is Open.