AVI (Audio Video Interleave) is not fully compatible with QuickTime due to differences in codecs. QuickTime primarily supports files with MPEG-4 and H.264 codecs, whereas AVI files often use codecs like DivX or Xvid, which are not native to QuickTime. Additionally, AVI files may contain audio or video streams that QuickTime does not recognize, leading to compatibility issues. Conversion to QuickTime-compatible formats like MOV is often necessary for seamless playback.