A .pyo file is a compiled version of a Python source code file (.py). It's created when Python is run with the -O or -OO optimization flags. These flags instruct the Python interpreter to perform some optimizations during compilation, such as removing assert statements and docstrings (with -OO). The resulting .pyo file contains bytecode, which is a lower-level representation of the Python code that can be executed by the Python Virtual Machine (PVM). Using .pyo files can potentially improve the startup time of Python programs, as the compilation step is already done. However, the performance gains are often negligible in modern Python implementations. .pyo files are specific to the Python version used to compile them, and they are not human-readable. They are typically used in conjunction with .pyc files (which are created without optimization) to distribute compiled Python code. Note that with Python 3.5 and later, .pyo files are replaced by .pyc files stored in the __pycache__ directory, and the optimization level is indicated within the .pyc file's name (e.g., .opt-1.pyc).