HATEOAS (Hypermedia as the Engine of Application State) is a key constraint in RESTful API design. It specifies that clients interact with a REST API entirely through hypermedia provided dynamically by the server. This means that instead of hardcoding API endpoints into the client application, the server provides links within responses that guide the client on available actions.

For example, if a client queries a RESTful API for user account information, the response might include links to update the account, view order history, or deactivate the account. These links, embedded in the response as hypermedia, provide the client with actionable steps, making the API self-descriptive.

HATEOAS enhances API flexibility and reduces client-server coupling. Clients don’t need to hardcode knowledge of the server's structure; instead, they rely on the hypermedia provided at runtime. This allows APIs to evolve without breaking client implementations, as changes in server logic are abstracted by the dynamic links.

While HATEOAS provides a strong theoretical foundation for RESTful systems, its adoption can be challenging due to increased development complexity. It requires detailed design and robust documentation to implement effectively. Despite this, it is particularly valuable in systems with frequent updates, such as e-commerce platforms or service marketplaces, where new features or workflows are introduced regularly.

By adhering to HATEOAS, APIs achieve greater interoperability, adaptability, and adherence to REST principles, resulting in robust and scalable systems.