An XML file is a text-based format used to store and transport data in a structured way. It stands for eXtensible Markup Language and allows users to define their own tags, making it flexible for various applications. XML files are commonly used for data exchange between different systems, as they can be easily read by both humans and machines. XML files consist of elements, attributes, and values organized in a hierarchical structure. Each element is enclosed in tags, which describe the data contained within. This format is widely used in web services, configuration files, and data storage, making it an essential tool for developers and data analysts.