The database initialization file is a text file containing a number of parameters that control how the Oracle database works. At a very high-level, you could categorize those parameters as:

1. A pointer to the database control files
2. Information about the database itself, such as the physical block size used when reading and writing datafiles
3. Parameters that control the Oracle background processes
4. Parameters that control how Oracle allocates memory
5. Pointers to the directories containing the alert log and trace files for the instance

Here are some lines from a typical initialization file:

db_name = devl
db_files = 1024
control_files = 
 (/m01oracle/oradata/SCTPROD/control01.ctl,
  /m21/oradata/SCTPROD/control02.ctl,
  /m57/oradata/SCTPROD/control03.ctl)
db_block_size = 8192

There are many parameters that you can set in the initialization file. Oracle documents all of them in the Oracle Server Reference Manual.
Look through the following SlideShow to learn about the most important parameters in a bit more detail:

Oracle reads the initialization file whenever you start an instance.
Any changes that you make to the initialization file afterwards will not take effect until you shut down and restart your system.
Strictly speaking, Oracle does not consider the initialization file to be part of a database.
here is why.
It is an important file though, and you want to preserve it with the same care that you do all the other files that are database files.

First, click the Exercise link below to find and look at your database's initialization file.
Initialization File - Exercise