In communications, a code is a rule for converting a piece of information (for example, a letter, word, phrase, or gesture) into another form or representation (one sign into another sign), not necessarily of the same type. In communications and information processing, encoding is the process by which information from a source is converted into symbols to be communicated. Decoding is the reverse process, converting these code symbols back into information understandable by a receiver.

One reason for coding is to enable communication in places where ordinary spoken or written language is difficult or impossible. For example, semaphore, where the configuration of flags held by a signaller or the arms of a semaphore tower encodes parts of the message, typically individual letters and numbers. Another person standing a great distance away can interpret the flags and reproduce the words sent.

In the history of cryptography, codes were once common for ensuring the confidentiality of communications, although ciphers are now used instead. See code (cryptography).

Codes in communication used for brevity

A cable code replaces words (e.g., ship or invoice) into shorter words, allowing the same information to be sent with fewer characters, more quickly, and most important, less expensively.

Code can be used for brevity. When telegraph messages were the state of the art in rapid long distance communication, elaborate commercial codes which encoded complete phrases into single words (commonly five-letter groups) were developed, so that telegraphers became conversant with such "words" as BYOXO ("Are you trying to weasel out of our deal?"), LIOUY ("Why do you not answer my question?"), BMULD ("You're a skunk!"), or AYYLU ("Not clearly coded, repeat more clearly."). Code words were chosen for various reasons: length, pronounceability, etc. Meanings were chosen to fit perceived needs: commercial negotiations, military terms for military codes, diplomatic terms for diplomatic codes, any and all of the preceding for espionage codes. Codebooks and codebook publishers proliferated, including one run as a front for the American Black Chamber run by Herbert Yardley between WWI and WWII. The purpose of most of these codes was to save on cable costs. The use of data coding for data compression predates the computer era; an early example is the telegraph Morse code where more frequently-used characters have shorter representations. Techniques such as Huffman coding are now used by computer-based algorithms to compress large data files into a more compact form for storage or transmission.

An example: the ASCII code

Probably the most widely known data communications code (aka character representation) in use today is ASCII. In one or another (somewhat compatible) version, it is used by nearly all personal computers, terminals, printers, and other communication equipment. It represents 128 characters with seven-bit binary numbers—that is, as a string of seven 1s and 0s. In ASCII a lowercase "a" is always 1100001, an uppercase "A" always 1000001, and so on. Successors to ASCII have included 8-bit characters (for letters of European languages and such things as card suit symbols), and in fullest flowering have included characters from essentially all of the world's writing systems (see Unicode and UTF-8).