REST (Representational State Transfer) is a software architecture style used for web services, facilitating communication between servers and clients through HTTP methods like GET, POST, PUT, and DELETE. CakePHP provides a straightforward way to implement RESTful routing and actions through configuration in the router and controller, allowing developers to reuse code and extend functionalities easily. There are additional tools and plugins, like an OAuth extension and a REST plugin, that enhance REST API capabilities in CakePHP.