What is a modular monolith and when is it appropriate?

Modular monolith is single deployment with well-defined module boundaries - combines monolith simplicity with microservices-like modularity. Modules: own domain, internal data, explicit APIs, can be extracted to services later. Benefits: simple deployment, no distributed system complexity, easier refactoring, enforced boundaries prepare for microservices. Implementation: Maven/Gradle modules, package structure with ArchUnit enforcement, separate databases per module. Appropriate: smaller teams, unclear boundaries, starting new project. Netflix and Shopify advocate this approach before microservices.