In software architecture, 'API' stands for Application Programming Interface. An API is a set of rules and protocols that allow different software applications to communicate with each other. It defines the methods and data formats that applications can use to request and exchange information, promoting interoperability among systems. APIs enable developers to build on existing platforms, integrate new features, and access data from other applications without needing to understand the underlying code. This modular approach enhances development speed and facilitates the creation of innovative solutions in various software applications.