tar (tape archive) stores files (and directories) in an archive.

tar can be used to create (option -c), to list (-t) or to extract (-x) an archive.

tar options meaning
-f tarfile save/read in the archive tarfile (by default, the standard output is used for reading and the standard input is used for archiving)
-v verbose: provide more information
-z compress/uncompress the archive with gzip/gunzip
-j compress/uncompress the archive with bzip2/bunzip2
-C dir change the default directory by dir
# create an archive
tar -cvf /tmp/toto.tar  .
# list the content of an archive
tar -tvf /tmp/toto.tar
# extract in the /tmp/toto directory
mkdir /tmp/toto
cd /tmp/toto
tar -xvf /tmp/toto.tar
# ou directly
tar -xvf /tmp/toto.tar -C /tmp/toto
# create a compressed archive
tar -czvf /tmp/toto.tgz .

By convention, tar archives are suffixed .tar. Gzipped compressed archives are suffixed .tar.gz or .tgz. Bzipped compressed archives are suffixed .tar.bz2.

gunzip -c toto.tgz > toto.tar