Kepub is a term used to describe the eBook format designed for Kobobooks.
Kobo is a company that has developed their own variation on standard ePubs. They have added a database (SQLite) that helps them read and manage books that come from their bookstore or another bookstore that has adopted their format. In some cases the books downloaded from their web store will be stored directly in this database and in other cases the books will be stored separately but will be referenced and managed from the database.
The application used to read these eBooks is call Nickel. It is the only reading application on a Kobo Device and can read ePub as well as PDF and CBZ formats. It is capable of working with Adobe DRM. It is also available as Kobo eReading Apps for a wide variety of platforms.
Kobobookstores can also sell standard ePub books which can be read on any device that supports ePub. The user will need to ensure which formats are available for a particular book. Regular ePub support is based on Adobe's RMSDK while Kobo ePub on NetFront's ACCESS engine.
 kepub folder
If you attach a Kobo reading device to your computer via USB you will find that it mounts the readers internal memory as an external disk drive on the computer. You can examine the contents of this area and will find a .kobo folder. (If you have a Linux system you will have to use ls -a to see it). Inside the .kobo folder you will find the SQLite database and a second folder called kepub. This folder is where the name came from. (There is also a images folder containing the bookshelf images.)
The kepub folder holds a number of files with long numbered names and no extension. If you copy one of those to your computer and then add a .zip extension so you can open it you will find that it is really an ePub file. Much of the contents is encrypted with DRM but some files are in plain text such as the OPF file and the CSS file. This file is the main reading file for ePub on Kobo devices beginning with version 1.9 of the operating system.
On a desktop PC you will find this same information stored at \Documents and Settings\Your Name\Local Settings\Applications Data\Kobo\Kobo Desktop Edition (\Users\Your Name etc. on Vista and Windows 7).
 sqlite database
The Kobo.sqlite database is the heart of the Kobo system. Sqlite is a standard database and you can use readily available tools to look at its content. However, the actual structure is not documented and any changes could corrupt the database so are not recommended.
Kepub files use a proprietary DRM scheme, sometimes called "kdrm" due to its characteristic xml tags in the rights.xml file. While many kdrm-protected kepub ebooks are also available for download as regular epubs with ubiquitous Adobe DRM, this is not always the case, restricting the use of these ebooks to Kobo devices and reading applications. Tools to remove this DRM scheme are have recently been developed.
Extras features are available for eBooks being managed by the Kobo database. Some are restricted to only purchased DRM eBooks. Some are no longer applicable to latest firmware.
- highlighting of words in the document.
- multiple bookmarks of pages in the document.
- dictionary lookup of a selected word in the document.
- being able to add annotation to a highlighted word.
Comparison of Kepub and ePub with both on a Kobo device.
Positive: KePub (sideloaded):
- Quicker to respond to page turn gestures (especially tap gesture)
- Faster text selection (e.g. when highlighting large areas of text)
- Support for footnote previews
- Can double-tap to zoom images
Positives for standard ePub on a Kobo device:
- Better hyphenation (kepub reader can hyphenate words in the wrong place if they have trailing punctuation)
- Full justification works properly (kepub reader doesn't properly justify some lines that contain certain common characters such as ellipsis and mdash)
- Better support for embedded fonts
- Full-screen mode works without fonts being cut off
- Better word spacing when using full justification
(Apart from the last, all of these ePub advantages are due to bugs in the KePub reader.)