Java 8+

Use Java NIO.2 features, including the Paths and Files utility classes.

Call Files.lines to get a stream a Stream of the lines read from the file. Defaults to UTF-8 character encoding, with option to specify character-encoding.

String fileName = "path/to/example.txt" ;
try 
    (
        Stream<String> stream = Files.lines(Paths.get(fileName))
    ) 
{
    stream.forEach(System.out::println);
}

You have to place the Stream in a try-with-resource block to ensure the #close method is called on it, otherwise the underlying file handle is never closed until the garbage collector does it much later.

Earlier Java

A common pattern is to use BufferedReader.

try (BufferedReader br = new BufferedReader(new FileReader(file))) {
    String line;
    while ((line = br.readLine()) != null) {
       // process the line.
    }
}

You can read the data faster if you assume there is no character encoding. e.g. ASCII-7 but it won't make much difference. It is highly likely that what you do with the data will take much longer.

EDIT: A less common pattern to use which avoids the scope of line leaking.

try(BufferedReader br = new BufferedReader(new FileReader(file))) {
    for(String line; (line = br.readLine()) != null; ) {
        // process the line.
    }
    // line is not visible here.
}