A 4x4 matrix keypad can be interfaced with an 8051 microcontroller to detect key presses. The rows of the keypad are connected to output port pins on the microcontroller, which are set high or low to scan each row. The columns are connected to input port pins, which the microcontroller reads to detect a low value, indicating a key press. By scanning each row and detecting the low column, the microcontroller can identify the specific key pressed. The document provides a circuit diagram and pin assignments for interfacing a 4x4 keypad with an 8051 development board to allow scanning and detecting keys.