API versioning plays a critical role in maintaining software stability during updates. It allows developers to introduce new features or make changes without disrupting existing client applications. By implementing versioning, a developer can ensure that older versions of the API remain functional while simultaneously offering improvements in newer ones. For example, backward compatibility can be achieved, allowing clients that rely on older functionalities to continue working seamlessly. This practice helps in fostering a positive user experience, as it minimizes disruptions and encourages gradual transitions to updated features, ultimately supporting long-term software evolution.