A .zip file is a compressed archive format used to store one or more files or folders. It reduces file size through a compression algorithm, making it quicker and easier to transfer or store. In Windows, to create a .zip file, select the files/folders, right-click, choose “Send to,” and then select “Compressed (zipped) folder.” To extract files, right-click the .zip file and select “Extract All” to unzip the contents into a specified folder.