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An efficient way to reduce the size of your Outlook Data File (.pst) or Exchange mailbox is to regularly archive older items. Unlike a traditional backup in which a copy of Outlook items is made, archived items are moved to a separate Outlook Data File (.pst).
What AutoArchive Does with Items AutoArchive can do one or both of the following for items in a folder: Permanently delete expired items; delete or archive old items to an archive file. The archive file is a special type of data file. The first time AutoArchive runs, Outlook creates the archive file automatically in the following location: C:\Documents and Settings\yourusername \Local Settings\Application Data\Microsoft\Outlook\Archive.pst.