An API sandbox is a virtual testing environment that mimics the production environment of an API, allowing developers to safely test and experiment with API calls, functionalities, and integrations without affecting live data or systems. It provides a controlled space where developers can simulate real-world use cases, troubleshoot issues, and fine-tune their applications before deploying them to production. API sandboxes often come with dummy data and are designed to help developers understand how the API works and how it will interact with their own systems.