In Java 8, all the Single Abstract Method interfaces (SAM interfaces), such as java.util.Comparator, java.io.FilenameFilter, java.lang.Comparable, java.lang.Runnable, and so on, are given a new name called the Functional interface.

Functional interfaces are the interfaces that consist of the Single Abstract Method. These interfaces are the target for Lambda expressions. So in other words, Lambda expressions can only implement the interfaces that have only one abstract method. This is the other difference between Lambda and anonymous inner classes.

A new annotation type @FunctionalInterface is added in Java 8. So if an interface is annotated with @FunctionalInterface, it is not allowed to have more than one abstract method.

The following declaration will work:

@FunctionalInterface 
public interface Interface1 { 
  void method1(); 
} 

If you try to add one more abstract method to this interface, the compiler will throw an error stating - Interface1 is not a Functional Interface.