A NAT Gateway and a NAT Instance both serve the same purpose in AWS: they allow resources in a private subnet to access the internet (for software updates, package downloads, AWS APIs, etc.) while preventing inbound connections from the internet. The main difference is that a NAT Gateway is a fully managed service provided by AWS, whereas a NAT Instance is a self-managed EC2 instance configured to perform network address translation. A NAT Gateway automatically scales, offers higher availability, requires no maintenance, and is the AWS-recommended solution for production environments. In contrast, a NAT Instance requires you to handle patching, scaling, monitoring, and failover yourself. While NAT Instances can be cheaper for very small workloads and allow greater customization such as packet inspection or custom firewall rules, NAT Gateways are generally preferred because they provide better performance, reliability, and operational simplicity.