In digital audio lo-fi usually refers to an audio file with a lower bit rate, and thus a lower sound quality.
In some cases high fidelity recording is avoided, or the artifacts are deliberately retained or added to all, or part, of the recording for artistic reasons. This decision is usually made by the record producer.
Examples of lo-fi included the inclusion of analogue disc record crackles on compact discs, for example the Portishead album Dummy, and telephonic vocals on Craig David's track "Fill me in".
Lo-fi music is a genre of music which uses lo-fi recording practices. The aim is to sound "authentic", rather than "over-produced".
See also: Indie rock, Lo-fi bands