Version control in software development serves the purpose of managing changes to software code over time. It allows multiple developers to work on the same codebase while tracking modifications, facilitating collaboration and ensuring code integrity. With version control, teams can identify errors, revert to previous states, and maintain a history of changes, which enhances productivity and reduces the risk of losing work. This system also supports branching and merging, enabling developers to experiment with new features without affecting the main codebase.