A PSP ISO is a digital "image" of a Universal Media Disc (UMD). It takes the physical game disc and condenses it into a single file that can be stored on a Memory Stick.

A PSP ISO is an "image" of a game disc, containing all the game's code, graphics, and music in a single .iso file. Because these files are read directly from a memory stick or internal storage, they often feature than physical UMDs.