Material definitions and assignments can be separated into two distinct categories — local and external. By default, materials are local and saved in palettes with the DGN file, while external materials require external material assignment table (.mat) and material palette (.pal) files to be present during rendering. Options in the Material Editor dialog's Table menu let you convert or export local materials to external files.

Where required, you can access local palettes and their materials that are stored in other DGN files.

Material definitions — attributes related to color, texture, opacity (transparency), and finish — are created and stored in material palettes. For external materials, these are palette (.pal) files and always must be present when applying materials, or rendering. For local materials, the external palette file is required only the first time that you access a material. By default, it is then stored in the DGN file.