Does Eclipse have line-wrap

As mentioned in the post by VonC on this same page. Eclipse now has this capability as of 06/2016 Neon.

Try this plugin Eclipse platform plugin

It looks like eclipse only has the ability to do it manually on its own and here are the commands. At that point you must reformat the highlighted text manually.

It's not terribly obvious how to control Eclipse line width and line wrapping in your Java source files. Here's how and where:

Comment width and line wrapping is set in Preferences->Java->Code Style->Formatter, then click on the Edit button and select the Comments tab. I like Line Width for Comments to be 120.

Code line wrapping is set nearby, in Preferences->Java->Code Style- >Formatter, then click on the Edit button and select the Line Wrapping tab. I like a line width of 120 and indent size of 4.

Indentation is set separately, in Preferences->Java->Code Style- >Formatter, then click on the Edit button and select the Indentation tab. I like an indent size of 4, consistent with the Line Wrapping indent setting.

As if that's not enough, you can also set printer margins, tab size, etc, in Preferences>General>Editors>Text Editors where I set the Displayed Tab Width to 4 and Print Margin Column to 120 or more.

You can also check the Show Print Margin box to get a faint vertical line at the printer margin column

Update 2016

As mentioned by ralfstx's answer, Eclipse 4.6 M4 Neon (or more) has a word-wrap feature!
(Nov 2015, for release mid 2016). In any editor view, type:

Alt+Shift+Y

(Sadik confirms in the comments it works with Eclipse 2019-09)

By default, text editors are opened with word wrap disabled.
This can be changed with the Enable word wrap when opening an editor option on the General > Editors > Text Editors preference page.

Manually toggle word wrap by clicking in the editor window and pressing (Shift+Alt+Y).
On Mac OS X, press (Cmd-Opt-Y). [Updated May 2017]

The famous bug 35779 is finally closed by r/#/c/61972/ last November.

There are however a few new bugs:

• 481873 "No line ruler number repaint on text editing with disabled "quick diff""
• 484142: "Word Wrap makes some actions very slow"
• 488162: "[word wrap] Hide WW preference to avoid unexpected performance impact"

As long as we are unable to provide acceptable editor performance for big files after toggling editor word wrap state on, we should make sure users can't set WW preference 1 always on by default and wonder why the editors are slow during resizing/zooming.

(2020) MarcGuay adds in the comments:

If you want the wrapping to be persistent/automatic, the cdhq plugin seems to still work with the 2019-03 version of Eclipse.
After installing you can turn it on via Window->Preferences->Word Wrap.

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Update 2014

The de.cdhq.eclipse.wordwrap Word-Wrap Eclipse plug-in just got updated, and does provide good wrapping, as illustrated in the project page:

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Original answer May 2010

Try the Eclipse Word-Wrap Plug-In here.

Just for the record, while Eclipse Colorer might bring wrapping for xml files, Eclipse has not in general a soft wrapping feature for Text editor.

Soft and hard. Soft will just warp the text at the right window border without adding new line numbers (so there are gaps in the list of numbers when you enable them).

This is one of the most upvoted bugs in Eclipse history: bug 35779 (9 years and counting, 200+ votes)

Update February 2013:

That bug references an old Word wrap plugin, but Oak mentions in his answer (upvoted) a new plugin for recent (Juno+) versions of Eclipse (so 3.8.x, 4.x, may have been seen working with 3.7)
That plugin is from Florian Weßling, who just updated it (March 2013)

Right click in an opened file and select "Toggle Word Wrap" (shortcut ctrl+alt+e)