Key difference: PSD and PSB are file formats for storing digital images. They are commonly used in Adobe Photoshop. PSD in fact stands for "Photoshop Document." PSB stands for "Photoshop Big." It is also known as a large document format.

PSD and PSB are file formats for storing digital images. They are commonly used in Adobe Photoshop. PSD in fact stands for "Photoshop Document." PSB stands for "Photoshop Big." It is also known as a large document format. The two formats are quite similar; however they do differ in the manner that they store and are used.

PSD is the default file extension for Photoshop files. A PSD file stores an image with support for most Photoshop imaging options, including layers with masks, color spaces, ICC profiles, CMYK Mode, transparency, text, alpha channels and spot colors, clipping paths, and duotone settings. Whereas other image formats, such as a JPG or a GIF only store the image and no other content with it.

However, as compared to other image file formats, a PSD file can be much bigger in size, due to all the other information stored on it in addition to the image. Furthermore, a PSD file works only with Adobe Photoshop and other related Adobe software programs, such as Adobe Illustrator, Adobe Premiere Pro, and After Effects.

Hence, a PSD file is usually used only while working on an image in Adobe as it can be stored with all the edits and layers. As long as the image is in the PSD format, changes can be made to the image and its layers. Once, the image is finalized it can be converted and stored in another format, such as JPEG, as it is a much more popular and usable format on many various platforms.

PSB is essentially the same as a PSD file. A PSB file extends the PSD file format. It increases the maximum height and width of a PSD file from 30,000 pixels to 300,000 pixels. The dimension limit was chosen by Adobe for ease of software testing rather than based on computer arithmetic constraints. The PSD file can support an overall file size of 2 GB, anything above that can be saved as a PSB file.

Similar to a PSD file, PSB also saves the image with all of the corresponding Photoshop imaging options. In fact, it can save all of the information and more, as it can save a bigger date size than a PSD file. 

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