Fault tolerance in distributed systems is significant as it ensures system reliability and availability. By implementing redundancy and error detection mechanisms, distributed systems can continue to function even when some components fail. This capability is crucial for applications that require high uptime, such as financial transactions and healthcare systems. Fault tolerance minimizes downtime and data loss, ultimately enhancing user trust and satisfaction in technology solutions. The ability to recover quickly from faults makes systems resilient, which is essential in today's data-driven environments where uninterrupted service is expected.