AWS Lambda is a service that lets developers run code without provisioning or managing servers. Lambda provides a local file system that can be used to store temporary files during invocation. The local file system is mounted under the /tmp directory and has a limit of 512 MB. The temporary files are accessible only by the Lambda function that created them and are deleted after the function execution ends. The developer can store temporary files that are less than 10 MB in the /tmp directory and access and modify them multiple times during invocation.