Modular monoliths combine the simplicity of traditional monolithic applications with the organizational benefits of microservices. This architecture organizes a single deployable application into well-defined, loosely-coupled modules that communicate through explicit interfaces. Unlike microservices, modular monoliths avoid distributed system complexity while maintaining clear boundaries and separation of concerns. The approach offers benefits like simplified deployment, improved performance through in-memory communication, easier transaction management, and a smooth migration path to microservices when needed. Major companies like Google and Shopify have adopted this pattern to balance development velocity with architectural flexibility.