The acronym API stands for Application Programming Interface. It is a set of rules and protocols that allow different software applications to communicate with one another. APIs enable developers to access specific features or data of an application, system, or service without needing to understand its underlying code. This modular approach promotes interoperability and enhances software development by allowing for the integration of diverse services, such as payment gateways, data analytics, and social media platforms. APIs play a crucial role in creating scalable and flexible software architectures.