A version control system serves a crucial purpose in collaborative software development by enabling multiple developers to work concurrently on the same project without conflicts. It tracks changes, maintains historical versions, and facilitates collaboration through branching and merging. This system ensures that code modifications are documented, allowing teams to roll back to previous versions if necessary. It promotes accountability and reduces the risk of errors in the codebase. Ultimately, version control systems enhance team productivity, streamline workflows, and improve software quality in collaborative environments.