React Hooks provide an alternative way for functional components to manage state and side effects, making it easier to write more efficient and scalable code. The useState hook introduces a state variable, while the useEffect hook handles side effects such as API calls. By using these hooks, developers can create reusable functions that fetch data from APIs, display the response, and update the component state accordingly. This approach allows for better organization, reusability, and maintainability of code, making it an attractive solution for building dynamic user interfaces with React.