API endpoints are specific locations within an API that accept requests and send back responses, allowing different systems and applications to communicate with each other by sending and receiving information and instructions via the endpoint. They have a base path and can be presented as paths within the main site or dedicated subdomains, and developers can create logical groupings using this structure, which is useful for maintaining hierarchical relationships between resources. By understanding API endpoints, developers can access data and functionality from other systems without having to build everything from scratch, ultimately enabling them to create new apps that can easily access and use data and functionality from other systems.