A compressed folder is a single computer file that can contain many items, which it stores in a way that can reduce the total amount of disk space required. Although there are multiple types of compressed folders, the most common type is the ZIP compressed folder, which is compatible with multiple operating systems. Compressed folders have many advantages because they allow users to store several items within one file, which makes it much simpler to send multiple files in an email or file transfer application.

The extent of compression that compressed folders can use depends on the files contained within the folder. If a file was already compressed before it was added to a compressed folder, the file size will probably not be reduced further. This is common with compressed videos and images but can occur with various other types of already compressed files. There are also many different types of software available for compressing files, and some software lets the user specify a level of compression to use. One must keep in mind, however, that highly compressed files can take longer to extract than files using the default level of compression.