What is an ICO file? ICO is an image file format that is used to store icons. (32x32) (16x16) Fig. 1  An ICO file can contain several small icons. It is used for desktop icons and smaller images that appear in various parts of a web browser. Generally, the file format is of interest to people who are developing web sites. Collabyrinth is one of the only free software programs for creating ICO files.