exFAT is an incompatible file system, that was introduced with Windows Embedded CE 6.0 in November 2006. It is loosely based on the File Allocation Table architecture, but proprietary and protected by patents.

The MBR partition type is 0x07 (the same as used for IFS, HPFS, NTFS, etc.). exFAT is intended for use on flash drives (such as SDXC and Memory Stick XC), where FAT32 is otherwise used.

It offers several benefits over FAT32 including breaking the 4 GB file size limit of FAT32 (only without the FAT+[2] extension, which allows files larger than 4 GB also on FAT32 volumes), being more space-efficient for files smaller than 64 KB on large volumes and, compared to light-weight implementations of FAT32 in DOS and some embedded systems, it can offer faster seeks if more than a few thousand files are stored in a single sub-directory, whereas FAT32 is typically faster than exFAT for larger files as used on digital cameras, camcorders and media players or when flash cards are used mainly for archival purposes.

Storage devices formatted as exFAT cannot exchange data with equipment not supporting the format. Much equipment does not support exFAT, which requires acquisition of a license from Microsoft; this involves a cost, and is also against the policy of open source operating systems.