The app directory is the center of an App Router application. A folder becomes a route when it contains the appropriate special file such as page.tsx.

Common special files include layout.tsx, page.tsx, loading.tsx, error.tsx, not-found.tsx, and route.ts.

Other directories such as components, lib, services, and types are application conventions rather than mandatory Next.js requirements. A large application benefits from separating UI components from business logic and infrastructure code.

A useful architecture is to keep route-specific UI near the route while keeping shared business logic in reusable modules.