Photoshop's native, layered file format. The layers enable an illustration to be built with individual graphic elements that can be moved over and over to obtain a desired result. When the PSD format is converted into a TIFF, JPEG, GIF or other graphics format, the layering is "flattened" into one bitmapped image. For example, it would be very difficult to build a collage of many images overlapping each other without layers, because the placement of each object would have to be perfect from the start. Without layers, once a small bitmap is placed on top of the large bitmap, it becomes "one with the image" and cannot be altered at all or at least without major effort. See extension.