User acceptance testing (UAT) is significant in software development as it is the final phase of validating if the product meets user needs and expectations. In this process, end-users test the software in real-world scenarios to identify any issues or functional gaps before its official launch. UAT ensures that the software aligns with business requirements and is user-friendly, ultimately reducing the risk of failure after release. Successful UAT fosters user confidence and satisfaction, enhancing the overall success of the software project.