When I started building with the Next.js App Router I treated Server Actions as a straight replacement for API Routes.
The Core Difference
API Routes are HTTP endpoints. Server Actions are async functions that run on the server but are invoked directly from client components.
My Decision Rule
- Server Action — form submissions, mutations only called from your own UI
- API Route — third-party webhooks, mobile app backends
- Neither — if you are already inside a Server Component, just call the function directly