The purpose of a testing environment in software development is to provide a controlled setting where new features, updates, and fixes can be evaluated before being released to users. This environment mimics the production setup, allowing developers to test for bugs, performance issues, and compatibility. Conducting tests in a dedicated environment ensures that the final product is stable and meets the required specifications. Moreover, it helps improve the overall quality of the software, reducing the risk of issues arising in the live application post-launch.