STEP: STEP is a neutral CAD file format (ISO 10303) that stores a part as exact solid geometry with units, so it can be opened in any CAD or CAM program without losing accuracy.
STEP (file extensions .step and .stp) is the standard way to move a 3D design between different CAD systems. Unlike an STL, which approximates a surface with triangles, a STEP file stores the exact mathematical shape: true cylinders, planes, fillets and freeform surfaces, joined into a solid. It also carries units and can hold assemblies.
That exactness matters most for machining. A CAM program needs to know that a hole is a true 10.00 mm cylinder to choose a tool and generate a toolpath. From a mesh it can only guess. For sheet metal, a STEP file lets software find bends and unfold the part.
Example: a buyer wants a bracket CNC-milled and printed. The shop asks for a STEP. It can mill directly from it, and it can still turn it into a mesh for the printer whenever needed. Going the other way, from STL back to an accurate STEP, is slow and rarely exact.
STEP has application protocols, most often AP203 and AP214, and the newer AP242, which can also carry product manufacturing information such as tolerances. Not every program reads every protocol fully.
STEP replaced IGES as the preferred neutral format because it represents solids more reliably. For when to ask for which file, read STL vs STEP vs 3MF.
Go deeper: STL vs STEP vs 3MF (and OBJ, DXF, IGES): which file to send for a quote