PSD, PSD which stands for Photoshop Document, this is the default format that Photoshop uses for PSD saving data, a proprietary file that allows the user to work with the images’ individual layers even after the file has been saved. can be saved in PSD format. A PSD, which stands for Photoshop Document, is a layered image file used in Adobe PhotoShop. can be saved in PSD format. A PSD, which stands for Photoshop Document, is a layered image file used in Adobe PhotoShop. PSD, which stands for Photoshop Document, this is the default format that Photoshop uses for saving data, PSD a proprietary file that allows the user to work with the images’ individual layers even after the file has been saved.