iCloud & iCloud Photos · Online-only files and Optimize Mac Storage
What does online-only mean for an iCloud Drive file?
Short answer: An online-only file keeps its contents in iCloud while your Mac keeps just its name and details. It still shows in Finder with a cloud icon, uses almost no local space, and downloads automatically when you open it.
An online-only file is one whose contents live in iCloud while your Mac keeps only its name, icon and details. It still appears in Finder in the same folder, but it takes up almost no space on your disk until you open it.
When you open an online-only file, macOS downloads it automatically and it becomes a normal local file again. You need an internet connection for that first open.
In Finder an online-only item shows a small cloud icon next to its name. Making a file online-only is never a delete — the file, its folder and its sync state in iCloud are untouched. That's why Storage Studio uses online-only, rather than deleting, whenever it frees space from iCloud. See how to make iCloud files online-only.