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You have a .tar.bz2 archive, probably from a Linux software project. BZ2 is bzip2 compression — it squeezes harder than gzip at the cost of being slower. The resulting files are 10–20% smaller, which matters when you're distributing large source code tarballs or backing up servers.
Bzip2 uses the Burrows-Wheeler transform followed by Huffman coding — a mathematically elegant approach that Julian Seward implemented in 1996. It's a single-file compressor like gzip, so it's paired with TAR for archives. The format had its heyday in the early 2000s when bandwidth was expensive and the extra compression justified the slower speed. XZ has since overtaken it for most use cases.
Linux and macOS handle .bz2 natively (`tar -xjf archive.tar.bz2`). macOS Finder opens .tar.bz2 with a double-click. 7-Zip (free) handles it on Windows. If you're choosing a compression format for new archives, XZ gives better ratios at similar speeds. BZ2 is the middle child — better than gzip, worse than XZ, still everywhere.