Difference between Machine.config and web.config :-

The machine.config file is the master configuration file on your system with a lot of default settings. Web.config is the file for the local settings to be applied for a website which store configuration data in XML format.

The settings of Machine.config file are applied to the whole asp.net applications on your server whereas the settings made in the Web.config file are applied to that particular web application only.

The machine.config would be to share values between many applications on the server such as SMTP server settings while Web.config files contain application specific items such as database connection strings. If you make any changes to the web.config, web application will immediately load the changes but in case of machine.config you will have to restart the application.

The machine.config file will automatically installed when you install Visual Studio.Net and it exist exists in the c:\windows\microsoft.net\framework\version\config folder