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MAT files store MATLAB workspace variables — matrices, arrays, structures, cell arrays, and everything else MATLAB works with — in a binary format optimised for fast loading. When a MATLAB user saves their workspace (`save('data.mat')`), every variable in memory gets serialised into a single .mat file that can be loaded later with a single command.
The format has evolved through several versions. Version 5 (most common) stores data in a tagged binary format. Version 7.3 uses HDF5 under the hood, which means non-MATLAB tools can read it using HDF5 libraries. For interoperability, v7.3 is preferred — it's a standard format wearing a MATLAB coat.
Python's scipy.io.loadmat() reads v5 MAT files, and h5py reads v7.3 files. This makes Python the standard tool for accessing MATLAB data without a MATLAB licence. Octave (free MATLAB alternative) reads both versions natively. For sharing data outside MATLAB, exporting to CSV, HDF5, or Parquet is more portable.