Responsive design is crucial in modern web development as it ensures that websites function well across various devices, such as smartphones, tablets, and desktop computers. By using fluid grids, flexible images, and CSS media queries, responsive design adapts the layout to fit any screen size. This enhances user experience and accessibility, leading to increased engagement and lower bounce rates. Furthermore, responsive design positively impacts SEO rankings since search engines prioritize mobile-friendly sites. Overall, it reflects the need for businesses to meet the diverse needs of users in an increasingly mobile-centric world.