From LXF Wiki

Bzip2 is one of the two most common Linux compression formats. Like Gzip, it only compresses a single file or stream, and is therefore often used in conjuction with tar.

To compress and uncompress a single file use:

 $ bzip2 tst.file                 # Creates tst.file.bz2
 $ bunzip2 tst.file.bz2           # Recreates tst.file

Usually, bzip2 is invoked from the tar executable as it allows multiple files to be compressed at once. To do this, use:

 $ tar -cjC myFolder   # Compresses whole folder to myFolder.tbz2
 $ tar -cjf myFile          # Compresses single file to myFile.tbz2

To uncompress the tar bzip2 file, use:

 $ tar -xjf myFile.tbz2

For full help with bzip2 or tar, see the built-in manual pages, i.e.

 $ man bzip2
 $ man bunzip2
 $ man tar