ZFS is an innovative file system that provides immense storage capacity, data integrity, and simplified administration. It was developed by Sun Microsystems and introduced in 2005. Key features of ZFS include its ability to detect and self-heal data errors, use copy-on-write transactions, and support up to 256 quadrillion zettabytes of storage in a single pool. While powerful, ZFS has some limitations around boot support and encryption. It is supported on Solaris and is being ported to other platforms like Linux and FreeBSD.