User-centered design is crucial in software development as it prioritizes the needs, preferences, and limitations of end-users. By involving users in the design process, developers can create interfaces that are intuitive, engaging, and functional. This approach reduces the risk of usability issues and enhances user satisfaction. Regular feedback sessions during development ensure that the product aligns with user expectations and requirements. Ultimately, adopting a user-centered design leads to larger adoption rates and improved success for software products in the market.