The importance of versioning in API management lies in its ability to maintain compatibility and stability as applications evolve. Versioning allows developers to introduce new features or make changes without disrupting existing users or services. It enables backward compatibility, ensuring that applications relying on older API versions continue to function effectively. Moreover, clear versioning documentation helps users understand updates and modifications, fostering smoother transitions and integration. By implementing effective versioning strategies, organizations can manage development timelines better while enhancing user experience.