Agile methodology plays a pivotal role in software development by promoting iterative progress through collaborative teamwork. It encourages flexibility and responsiveness to changes during development, focusing on delivering functional software incrementally. Agile emphasizes regular feedback, allowing teams to adjust features and improvements based on user needs. Common frameworks under Agile include Scrum and Kanban, which enhance productivity and communication. This approach results in higher-quality products, faster delivery times, and increased stakeholder satisfaction in the development lifecycle.