Virtualisation on block level means that storage capacity is made available to the operating system or the applications in the form of virtual disks

In virtualisation on block level the task of file system management is the responsibility of the operating system or the applications

The task of the virtualisation entity is to map these virtual blocks to the physical blocks of the real storage devices

Virtualisation on file level means that the virtualisation entity provides virtual storage to the operating systems or applications in the form of files and directories

The applications work with files instead of blocks and the conversion of the files to virtual blocks is performed by the virtualisation entity itself(This means, the task of file system management is performed by the virtualisation entity, unlike in block level which is done by OS or application )

The physical blocks are presented in the form of a virtual file system and not in the form of virtual blocks.