Artificial Intelligence (AI) has become a pivotal force in the field of interior design, significantly influencing both aesthetic development and functional optimization of interior spaces. As computational technologies advance, the discipline is transitioning from intuition-based workflows to hybrid systems that blend human creativity with algorithmic intelligence. This research explores the impact of AI on spatial planning, visual generation, personalization, sustainability, environmental control, and user interaction. By conducting a qualitative analysis of peer-reviewed studies and documented real-world applications, this paper evaluates the contributions of generative models, machine learning algorithms, predictive analytics, and smart building technologies. The findings reveal that AI enhances design efficiency, supports evidence-based decision-making, and improves user experience, while still requiring professional oversight. The study concludes that AI acts as a collaborative extension of a designer's capabilities, enriching both artistic expression and spatial performance in modern interior environments.