Designing a RESTful API involves adhering to the principles of Representational State Transfer (REST) to ensure scalability, performance, and simplicity. Begin by defining clear and consistent endpoints using nouns to represent resources, such as /users or /orders. Employ HTTP methods (GET, POST, PUT, DELETE) to perform CRUD operations on these resources. Utilize HTTP status codes to indicate the success or failure of requests, and include meaningful error messages. Ensure statelessness by keeping all necessary state within the request, allowing the server to remain unaware of the client's state. Implement pagination, filtering, and sorting to handle large datasets efficiently. Finally, provide comprehensive documentation to assist developers in understanding and using the API effectively.