A MARKDOWN file is a text file created using one of several possible dialects of the Markdown language. It uses plain text formatting but contains inline text symbols that specify how to format the text (e.g., *bold* for bold text, or other markups for italics, indentation, headers, etc.). MARKDOWN files are designed for writing documentation in plain text that can be easily converted to HTML.
MARKDOWN file open in Microsoft Notepad
In addition to HTML documentation systems, Markdown files are also useful with source code version control systems. This is because the text files can easily be reviewed in plain text against historical revisions. Projects created with GitHub, a popular online version control system, often use a file named README.markdown, which contains the readme for the source code.
A Perl program named "Markdown" is available for converting Markdown to HTML. It can be downloaded at the Daring Fireball website, which is maintained by John Gruber, the developer of Markdown.
NOTE: Markdown files may also use the .MD, .MARKDN, and .MDOWN extensions. However, the ".markdown" and ".md" extensions are the most popular.