The purpose of a test environment in software development is to provide a controlled setting for testing new features, fixes, or performance improvements before the final deployment to users. This environment allows developers and testers to simulate real-world conditions, ensuring that the application functions correctly under various scenarios. By isolating testing from production, teams can identify and resolve issues without risking system stability or user experience. A well-defined test environment enhances the overall quality of software through thorough validation and improves team collaboration in the development lifecycle.