An environment file (.env) is a text file used to store configuration settings and sensitive data such as database credentials, API keys, and secret tokens. These files help separate sensitive information from the main source code, reducing the risk of accidental exposure. .env files are commonly used in development and deployment workflows to manage environment-specific variables securely. They should never be committed to version control systems like Git. Instead, access to .env files must be restricted to trusted users and systems. Proper handling of .env files is crucial to maintaining application security and preventing unauthorized access to confidential data.