A 'tar.bz2' file is a compressed archive format commonly used in Unix-like operating systems. It combines the functionalities of two separate utilities: 'tar' and 'bzip2'. First, the 'tar' utility is used to bundle multiple files and directories into a single archive file, often referred to as a 'tarball'. This tarball is essentially a container that preserves the directory structure and file metadata (permissions, timestamps, etc.). Subsequently, the 'bzip2' utility is employed to compress the tarball, reducing its overall file size. This compression makes it easier and faster to distribute and store large collections of files. The 'bzip2' algorithm provides a high compression ratio, making 'tar.bz2' a popular choice for software distribution, backups, and data archiving. To extract the contents of a 'tar.bz2' file, you typically need to first decompress it using 'bzip2' and then extract the archive using 'tar'. Many archive management tools can handle both steps in a single operation.