A .tgz file is a compressed archive file, essentially a combination of a TAR archive and Gzip compression. First, multiple files and directories are bundled together into a single TAR (Tape Archive) file. This TAR file is then compressed using the Gzip algorithm, resulting in a smaller file size with the .tgz extension (or sometimes .tar.gz). This two-step process makes .tgz files efficient for distributing software packages, backups, and other collections of files. The primary advantage is reduced storage space and faster transfer times compared to handling numerous individual files. The Gzip compression offers a good balance between compression ratio and processing speed, making it a widely used format, especially in Unix-like operating systems. When extracting a .tgz file, the process is reversed: first, the Gzip compression is undone, resulting in the original TAR archive, and then the TAR archive is unpacked to restore the original files and directories. This format is commonly used for distributing source code, software installers, and system backups.