Software engineering is a systematic discipline that focuses on the design, development, testing, deployment, and maintenance of software systems. With the rapid growth of information technology and digital transformation, organisations require software applications that are reliable, flexible, and adaptable to changing business requirements. Traditional software development approaches, such as the Waterfall model, often face limitations due to rigid planning and delayed customer feedback. To overcome these challenges, Agile technology emerged as a modern software development methodology that emphasises iterative development, collaboration, customer involvement, and continuous improvement. Agile methodologies enable software teams to develop products incrementally through short development cycles known as sprints. This approach improves communication among stakeholders, reduces project risks, and ensures faster delivery of software products. Frameworks such as Scrum and Extreme Programming have become widely adopted because they support adaptability and high software quality. Agile practices also encourage continuous testing, regular feedback, and teamwork, which improve customer satisfaction and project efficiency. This paper discusses the fundamentals of software engineering and examines the role of Agile technology in modern software development. The study explains Agile principles, Scrum practices, and Extreme Programming techniques while comparing Agile methodologies with traditional software development models. The paper also highlights the advantages and challenges of Agile implementation in organisations. The findings indicate that Agile technology has significantly transformed software engineering by enabling flexible development processes, faster software delivery, and improved product quality. Agile methodologies continue to play an important role in modern software industries and are expected to influence future software development practices.