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Time Machine is a piece of software included with the Mac operating system, Mac OS X 10.5 and higher (Leopard and higher). Time Machine functions by making a complete, bootable backup of the entire internal hard drive on a Mac onto an external hard drive of your choice (though it must be formatted specifically for the Mac, using the HFS+ formatting scheme). It makes backups of files every hour, every day, every week, and every month, until space on the chosen external drive that is used as the Time Machine is full.

From that point on, the software will delete the oldest backups, and add files or changes as they are added to the internal hard drive. For example, if you make a complete backup on October 1, any changes you make after that date will be added as "incremental" backups. If your October 1 backup did not fill up your entire external hard drive, then any changes would be added on October 2.

Time Machine works automatically once you have set it up, and once you have the external hard drive plugged in. It is recommended to make your backups as often as possible, in order to have the most recent files available to you in your backup, should you require them.

In the latest version of the Mac operating system, Mac OS X 10.7.1, Lion, you can also make Time Machine backups to an additional internal hard drive. However, if your entire computer is destroyed or otherwise damaged, your backup would also be lost, which is why it is often recommended to have an external, if not off-site (and/or online) backup as well.

Time Machine can also be configured to backup other external hard drives (such as USB flash drives) or NOT backup specific folders within your internal hard drive.

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Q: What does Time Machine on a Mac actually do?
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