7-Zip (p7zip)

Creates and extracts 7z, with the best general-purpose compression ratio available.

What it does

7z implements the 7z format — LZMA/LZMA2 compression, solid archives, AES-256 encryption including encrypted headers — and reads most other formats too.

7z a archive.7z folder/              # create
7z a -mx=9 -mhe=on -p archive.7z f/  # max compression, encrypted headers, password
7z x archive.7z                      # extract preserving paths
7z l archive.7z                      # list contents
7z t archive.7z                      # test integrity

Notes

-mhe=on encrypts the file list as well as the contents; without it an encrypted archive still reveals every filename inside. -mx=9 is slow and memory-hungry, but the ratio difference on source code and text is substantial.

The p7zip formula is the POSIX port; Homebrew also carries sevenzip, the official upstream build.

Alternative to

Alternative	Type	Trade-off
sevenzip	Open source	The official upstream 7-Zip build, also in Homebrew, and better maintained
Keka	Open source	The same formats with a GUI
zstd	Open source	Much faster for everyday compression, if the recipient has it
tar plus xz	Built in	Universally available on Unix