Service-oriented architecture is an architectural style and paradigm for designing distributed systems. It structures an application as a collection of discrete, interoperable services and investigates principles for building enterprise systems composed of loosely coupled, autonomous components that can be discovered and invoked over a network. Key characteristics include service encapsulation, loose coupling, contract-based interaction, and reusability. Its significance lies in promoting interoperability, flexibility, and agility in system development and integration, facilitating the composition of complex business processes from constituent services.