An API proxy is an intermediary service that receives API calls from a client and forwards them to an upstream application or vendor endpoint. It can rewrite headers, change routes, enforce authentication, cache responses, rate-limit traffic, or log requests before relaying them onward. In other words, the proxy sits in the middle of the conversation and may alter how the request is handled.
API proxies matter because they change the trust boundary. If users think they are talking directly to a service but are actually using a third-party proxy, that intermediary can see prompts, credentials, and metadata, and it may also affect billing, latency, and availability. Defenders use proxies for control and observability, while attackers or unauthorized resellers can use them to hide the true endpoint, divert traffic, or insert themselves into the data path. When reviewing an API connection, always verify who operates the proxy and what it does with the traffic.