Performance bottlenecks in a Node.js REST API can be caused by a variety of factors, including inefficient database queries, excessive middleware, blocking code, or unoptimized endpoints. Start by profiling your application using tools like `clinic` or `express-status-monitor` to identify slow operations or bottlenecks in your request-response cycle. Database queries are often a source of slowness, so optimizing indexes and avoiding unnecessary data fetching are critical steps. Additionally, reducing the number of middleware or optimizing them for performance can also help. For instance, compressing responses only when needed or logging fewer details in production can shave off significant time from each request. Using load balancing and caching frequently accessed data can also dramatically improve your API’s performance. By carefully profiling and optimizing each layer of your API, you can significantly reduce performance bottlenecks and ensure smoother operation under high traffic.