An APK (Android Package Kit) is the file format used by Android to distribute and install apps. It contains all the necessary components code, resources, assets, certificates, and manifest file for an app to function on Android devices. Users can download APK files from sources outside the Google Play Store to install apps manually, a process known as side loading. However, downloading from unknown sources can pose security risks. APKs are useful for testing, early access, or installing region-restricted applications.