What is the difference between an abstract class and an interface?

Abstract class can have both abstract and concrete methods, instance variables, constructors, and supports single inheritance. Interface (traditionally) only has abstract methods and constants, supports multiple inheritance. Use abstract class for 'is-a' relationship with shared implementation; use interface for 'can-do' capabilities. In Java 8+, interfaces can have default methods. Abstract classes are partially implemented templates; interfaces define contracts. Choose based on whether you need shared state/implementation (abstract class) or pure contracts (interface).