In digital photography, a picture is captured by a camera's image sensor in an image file. An image file is generally processed and compressed, before being stored on your camera's memory card. However, cameras can also store a picture without processing or compressing it - as a raw file. Think of camera raw files as photo negatives. You can open a raw file in Photoshop Elements, process it, and save it, rather than relying on the camera to process the file. Working with camera raw files lets you set the proper white balance, tonal range, contrast, color saturation, and sharpness.
To use raw files, set your camera to save files in its own raw file format. When you download the files from the camera, they have filename extensions like NEF, CR2, CRW, or other raw formats. Photoshop Elements can open raw files only from supported cameras. Visit the Adobe website to view a list of supported cameras.
Photoshop Elements does not save your changes to the original raw file (non-destructive editing). After processing the raw image file using the features of the Camera Raw dialog box, You can choose to open a processed raw file in Photoshop Elements. You can then edit the file and save it in a Photoshop Elements supported format. The original raw file remains unaltered.