Files ending in .7z are compressed archives created with Igor Pavlov's free 7-Zip open source packaging program. 7-Zip uses the open-source LZMA compression method, but can also use LZMA2, PPMd or BZip2. 7Z is next to .zip and rar the most common pack formats.
The LZMA compression method has a high compression rate and can also be provided with the strong AES-256 (256-bit) encryption, whereby the file names can be encrypted. The price for the high compression rate is a longer packing time.
The 7Z archive format can contain unicode file names (for example, Korean or Chinese characters) and has a maximum file size of 16,000,000,000 GB. Standard archives created with 7-Zip contain recovery data to repair the archive in case of corruption.
But you can also create so-called solid archives, which are sometimes considerably smaller (depending on the archived data), but contain no recovery data.