Material UI, a popular open-source UI component library that utilizes Material Design with React, can be effectively combined with Bit to enhance customization and modularity. By integrating Material UI with Bit, developers can customize and release each component as an independent package, which can be reused across different projects. The tutorial illustrates this process by creating a customized button component that extends the functionality of a standard MUI button and includes alert capabilities. It also covers setting up a custom environment to manage themes and compositions efficiently within the Bit workspace. This approach reduces boilerplate code and streamlines the integration of a theme provider, enabling developers to create a cohesive design system. Additionally, the guide demonstrates how to publish and manage these components, offering a scalable method for building and sharing composable UI libraries. The tutorial aims to provide insights into using Material UI with Bit, encouraging developers to share their creations and innovations.