Both delegates and interfaces allow a class designer to separate type declarations and implementation. A given interface can be inherited and implemented by any class or struct; a delegate can created for a method on any class, as long as the method fits the method signature for the delegate. An interface reference or a delegate can be used by an object with no knowledge of the class that implements the interface or delegate method. Given these similarities, when should a class designer use a delegate and when should they use an interface?

Use a delegate when:

• An eventing design pattern is used.

• It is desirable to encapsulate a static method.

• The caller has no need access other properties, methods, or interfaces on the object implementing the method.

• Easy composition is desired.

• A class may need more than one implementation of the method.

Use an interface when:

• There are a group of related methods that may be called.

• A class only needs one implementation of the method.

• The class using the interface will want to cast that interface to other interface or class types.

• The method being implemented is linked to the type or identity of the class: for example, comparison methods.

One good example of using a single-method interface instead of a delegate is IComparable or IComparable. IComparable declares the CompareTo method, which returns an integer specifying a less than, equal to, or greater than relationship between two objects of the same type. IComparable can be used as the basis of a sort algorithm, and while using a delegate comparison method as the basis of a sort algorithm would be valid, it is not ideal. Because the ability to compare belongs to the class, and the comparison algorithm doesn’t change at run-time, a single-method interface is ideal.

Extracted from Microsoft Technet articles.