APIs, or Application Programming Interfaces, play a crucial role in mobile app development by facilitating communication between different software components. They allow developers to access and integrate functionalities from external services, such as social media, payment gateways, and location services, enhancing the app's capabilities. This modularity simplifies the development process, enabling the rapid incorporation of features without having to build them from scratch. Moreover, APIs promote interoperability across platforms, ensuring seamless user experiences and faster deployment times for mobile applications.