RAR is a file format used for data compression and archiving. It allows users to reduce the size of files and folders, making them easier to store and share. RAR files can contain multiple files and directories, all bundled together into a single compressed file, which helps save disk space. To open and create RAR files, users typically need specific software, such as WinRAR or 7-Zip. These programs can extract the contents of RAR files, allowing users to access the original files. RAR is popular for sharing large files over the internet due to its efficient compression capabilities.