When an interactive login shell starts, it automatically executes one or more pre-defined files. Different shells execute different files; see the documentation of each shell for further information.
Most shells first run some global file, for example, the Bourne shell (/bin/sh) and its derivatives execute /etc/profile; in addition, they execute /.profile. /etc/profile allows the system administrator to have set up a common user environment, especially by setting the PATH to include local command directories in addition to the normal ones. On the other hand, /.profile allows the user to customize the environment to his own tastes by overriding, if necessary, the default environment.