PSD is the native format for Adobe Photoshop. It stands for PhotoShop Document. Photoshop is a popular graphics editing program. It is so popular that most competing programs can also read this format.
PSD can store an image with support for most imaging options available in Photoshop. These include layers with masks, color spaces, ICC Profiles, transparency, text, alpha channels and spot colors, clipping paths, and duotone settings. This is in contrast to many other file formats such as GIF that collapses the data for display purposes and does not allow further direct editing of the individual layers. Photoshop also can preserve this data in a specially designed version of PDF.
PSD supports RGB, indexed-color, CMYK, grayscale, Bitmap-mode, Lab color, and duotone images. It can also handle HDR data with 32 bits of precision. It has a 3D capability which can be used to drive 3D printers. Photoshop can use the data to output a 3D PDF.