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(NT File System) An optional file system for Windows NT, 2000, XP and Vista. NTFS is the more advanced file system, compared to FAT32. It improves performance and is required in order to implement numerous security and administrative features in the OS. For example, NTFS supports Active Directory domain names and provides file encryption. Permissions can be set at the file level rather than by folder, and individual users can be assigned disk space quotas. NTFS is designed to log activity and recover on the fly from hard disk crashes. It also supports the Unicode character set and allows file names up to 255 characters in length. See FAT32 and file system.