MPEG-1 Audio Layer 3, more commonly referred to as MP3, is a digital audio encoding format.

This encoding format is used to create an MP3 file, a way to store a single segment of audio, commonly a song, so that it can be organized or easily transferred between computers and other devices such as MP3 players.

MP3 uses a lossy compression algorithm that is designed to greatly reduce the amount of data required to represent audio recordings, yet still sound like faithful reproductions of the original uncompressed audio to most listeners. An MP3 digital file created using the mid-range bitrate setting of 128 kbit/s results in a file that is typically about 1/10th the size of the CD file created from the same audio source.

MP3 is an audio-specific format. It was invented by a team of international engineers at Philips, CCETT (Centre commun d etudes de television et telecommunications), IRT, AT&T-Bell; Labs and Fraunhofer Society, and it became an ISO/IEC standard in 1991. The compression works by reducing accuracy of certain parts of sound that are deemed beyond the auditory resolution ability of most people. This method is commonly referred to as Perceptual Coding.

It provides a representation of sound within the frequency domain, by using psychoacoustic models to discard or reduce precision of components less audible to human hearing, and recording the remaining information in an efficient manner. This is relatively similar to the principles used by, say, JPEG, an image compression format.