.kra is Krita’s internal file-format, which means that it is the file format that saves all of the features Krita can handle. It’s construction is vaguely based on the open document standard, which means that you can rename your .kra file to a .zip file and open it up to look at the insides. In Krita’s settings dialog you can enable compression; with compression enabled the files will be smaller, but saving will take longer.

Other applications mostly cannot open .kra files, and you cannot upload .kra as images on websites like twitter or deviantArt.

A .kra file contains a file names mergedimage.png which contains the rendered image as you see it on your canvas. Some applications, like Scribus, can use the mergedimage.png file to open .kra files. This file is always in the RGBA color model, or grayscale for files that are originally grayscale.

The .krz file format is a .kra file without mergedimage.png and with compression always enabled. You can use this format if you want to save disk space and do not care about interchange with those applications that load the mergedimage.png file.