The significance of API integration in modern applications lies in its ability to facilitate seamless communication between different software systems. APIs enable data exchange and functionality sharing, enhancing application capabilities and user experiences. By connecting diverse services, such as payment processing or social media, businesses can create comprehensive solutions that meet customer needs more effectively. Furthermore, APIs promote modular development, allowing developers to reuse existing components and innovate faster. Overall, API integration serves as a backbone for digital ecosystems, driving efficiency and collaboration in application development.