Testing microservice architecture locally presents significant challenges due to the complex interplay of numerous services and dependencies across business domains. Nylas has addressed this by creating a local developer environment that groups services by domain, leveraging Minikube to simulate a Kubernetes production environment and Tilt for efficient deployment and live updates. This setup allows developers to run and test services within their domain, using emulators for third-party dependencies and creating fake services for inter-domain interactions, thus avoiding the resource strain of running multiple domains locally. The integration of function tests with Continuous Integration (CI) through GitHub Actions ensures that changes are verified before deployment, enhancing developer velocity and system reliability.