A file extension (or simply "extension") is the suffix at the end of a filename that indicates what type of file it is. For example, in the filename "myreport.txt," the .TXT is the file extension. It indicates the file is a text document. Some other examples include .DOCX, which is used for Microsoft Word documents, and .PSD, which is the standard file extension for Photoshop documents.
While most file extensions are three characters in length, they can be as short as one character or longer than twenty characters. Sometimes long file extensions are used to more clearly identify the file type. For example, the .TAX2011 file extension is used to identify TurboTax 2011 tax returns and the .DESKTHEMEPACK extension identifies Windows 8 desktop themes. The file extension determines which program is used to open the file as well as what icon should be displayed for the file. It also helps you see what kind of file a certain document is by just looking at the filename.
Both Windows and Mac OS X allow you to manually change file extensions, which may also change the program the computer uses to open the file. While this might work for some files, it may also cause the file to not open at all. For example, if you change a file with a ".txt" extension to a ".doc" extension, Microsoft Word may still open it. However, if you change a ".txt" file to a ".psd" file, Photoshop will not recognize or open the file.
Since there are tens of thousands of file types, there are also tens of thousands of file extensions. While it may not be possible to remember all of them, it is helpful to learn some of the more common ones, such as .JPG, .GIF, .MP3, .ZIP, .HTML, and others. For a list of common file extensions and their associated file types, visit FileInfo.com's Common File Types page.