Microservices architecture differs from monolithic architecture in that it breaks down an application into smaller, independent services that communicate through APIs. Each service focuses on a specific business function, allowing for easier updates, scalability, and deployment. In contrast, monolithic architecture typically involves a single, unified application that can be more challenging to modify or scale as the entire system is interconnected. Microservices promote greater flexibility and resilience, enabling teams to work on different components simultaneously without impacting the whole application.