Facebook iconWhat is Tokenization and How does it work? - F22 Labs
Blogs/AI

What is Tokenization and How does it work?

Written by Ajay Patel
Sep 29, 2025
4 Min Read
What is Tokenization and How does it work? Hero

Tokenization is a fundamental process in Natural Language Processing (NLP) and plays a crucial role in preparing text data for machine learning models. This blog post will break down what tokenization is, why it's important, and how it works with a concrete example.

What is Tokenization?

Tokenization is the process of splitting text into smaller, manageable pieces called tokens. These tokens can be words, subwords, characters, or other units depending on the tokenization strategy. The purpose of tokenization is to transform text into a format that can be effectively processed by machine learning algorithms.

Why is Tokenization Important?

Before any NLP model can analyze and understand text, it needs to be converted into a numerical format. Tokenization is the first step in this conversion process. By breaking down text into tokens, we enable models to handle, learn from, and make predictions based on textual data.

How Tokenization Works

Let’s dive into a practical example to understand tokenization better. Consider the sentence:

"f22 Labs: A software studio based out of Chennai. We are the rocket fuel for other startups across the world, powering them with extremely high-quality software. We help entrepreneurs build their vision into beautiful software products."

Here’s a step-by-step breakdown of how tokenization works:

Step 1: Splitting the Sentence into Tokens

The first step in tokenization is breaking the sentence into smaller units. Depending on the tokenizer used, these tokens can be:

Tokenization Explained: How AI Breaks Down Language
Exploring the future of artificial intelligence
Murtuza Kutub
Murtuza Kutub
Co-Founder, F22 Labs

Walk away with actionable insights on AI adoption.

Limited seats available!

Calendar
Saturday, 1 Nov 2025
10PM IST (60 mins)

Words: ["f22", "Labs", ":", "A", "software", "studio", "based", "out", "of", "Chennai", ".", "We", "are", "the", "rocket", "fuel", "for", "other", "startups", "across", "the", "world", ",", "powering", "them", "with", "extremely", "high-quality", "software", ".", "We", "help", "entrepreneurs", "build", "their", "vision", "into", "beautiful", "software", "products", "."]

Subwords: the tokens might be more granular. For example, ["f22", "Lab", "s", ":", "A", "software", "studio", "based", "out", "of", "Chennai", ".", "We", "are", "the", "rock", "et", "fuel", "for", "other", "start", "ups", "across", "the", "world", ",", "power", "ing", "them", "with", "extremely", "high", "-", "quality", "software", ".", "We", "help", "entrepreneur", "s", "build", "their", "vision", "into", "beautiful", "software", "products", "."]

Characters: For character-level tokenization, the sentence would be split into individual characters: ["f", "2", "2", " ", "L", "a", "b", "s", ":", " ", "A", " ", "s", "o", "f", "t", "w", "a", "r", "e", " ", "s", "t", "u", "d", "i", "o", " ", "b", "a", "s", "e", "d", " ", "o", "u", "t", " ", "o", "f", " ", "C", "h", "e", "n", "n", "a", "i", ".", " ", "W", "e", " ", "a", "r", "e", " ", "t", "h", "e", " ", "r", "o", "c", "k", "e", "t", " ", "f", "u", "e", "l", " ", "f", "o", "r", " ", "o", "t", "h", "e", "r", " ", "s", "t", "a", "r", "t", "u", "p", "s", " ", "a", "c", "r", "o", "s", "s", " ", "t", "h", "e", " ", "w", "o", "r", "l", "d", ",", " ", "p", "o", "w", "e", "r", "i", "n", "g", " ", "t", "h", "e", "m", " ", "w", "i", "t", "h", " ", "e", "x", "t", "r", "e", "m", "e", "l", "y", " ", "h", "i", "g", "h", "-", "q", "u", "a", "l", "i", "t", "y", " ", "s", "o", "f", "t", "w", "a", "r", "e", ".", " ", "W", "e", " ", "h", "e", "l", "p", " ", "e", "n", "t", "r", "e", "p", "r", "e", "n", "e", "u", "r", "s", " ", "b", "u", "i", "l", "d", " ", "t", "h", "e", "i", "r", " ", "v", "i", "s", "i", "o", "n", " ", "i", "n", "t", "o", " ", "b", "e", "a", "u", "t", "i", "f", "u", "l", " ", "s", "o", "f", "t", "w", "a", "r", "e", " ", "p", "r", "o", "d", "u", "c", "t", "s", "."]

Step 2: Mapping Tokens to Numerical IDs

Once the sentence is tokenized, each token is mapped to a unique numerical ID using a vocabulary. The vocabulary is a predefined mapping that associates each token with a specific ID. For example:

Vocabulary:

{"f22": 1501, "Labs": 1022, ":": 3, "A": 4, "software": 2301, "studio": 2302, "based": 2303, "out": 2304, "of": 2305, "Chennai": 2306, ".": 5, "We": 6, "are": 7, "the": 8, "rocket": 2307, "fuel": 2308, "for": 2309, "other": 2310, "startups": 2311, "across": 2312, "world": 2313, ",": 9, "powering": 2314, "them": 2315, "with": 2316, "extremely": 2317, "high-quality": 2318, "products": 2319, "entrepreneurs": 2320, "build": 2321, "their": 2322, "vision": 2323, "into": 2324, "beautiful": 2325}

Token IDs:

[1501, 1022, 3, 4, 2301, 2302, 2303, 2304, 2305, 2306, 5, 6, 7, 8, 2307, 2308, 2309, 2310, 2311, 2312, 2313, 9, 2314, 2315, 2316, 2317, 2318, 2301, 5, 6, 2320, 2321, 2322, 2323, 2324, 2325]

So the original sentence is represented as the sequence of token IDs.

Real-World Tokenization

To analyze the tokens and token IDs for your example sentence using OpenAI's tokenizer, you can follow these steps:

1. Visit the Tokenizer Tool: Go to OpenAI's Tokenizer to access the tool.

Tokenization Explained: How AI Breaks Down Language
Exploring the future of artificial intelligence
Murtuza Kutub
Murtuza Kutub
Co-Founder, F22 Labs

Walk away with actionable insights on AI adoption.

Limited seats available!

Calendar
Saturday, 1 Nov 2025
10PM IST (60 mins)

2. Input Your Sentence: Enter your example sentence in the text box. 

View Tokens and IDs: The tool will display the tokens and their corresponding token IDs. Each word or subword will be split into tokens as per the GPT tokenizer's rules, and you can see how the sentence breaks down.

Analyze the tokens and token IDs using ChatGPT

Token IDs

Token IDs

Suggested Reads- What is a Large Language Model (LLM)

Conclusion

Tokenization is the crucial first step in transforming raw text into a format that machine learning models can understand. By breaking down sentences into tokens and converting them to numerical IDs, we prepare text data for further processing and analysis. Understanding how tokenization works is essential for anyone working with NLP tasks and models.

Author-Ajay Patel
Ajay Patel

Hi, I am an AI engineer with 3.5 years of experience passionate about building intelligent systems that solve real-world problems through cutting-edge technology and innovative solutions.

Share this article

Phone

Next for you

How to Use UV Package Manager for Python Projects Cover

AI

Oct 29, 20254 min read

How to Use UV Package Manager for Python Projects

Managing Python packages and dependencies has always been a challenge for developers. Tools like pip and poetry have served well for years, but as projects grow more complex, these tools can feel slow and cumbersome.  UV is a modern, high-performance Python package manager written in Rust, built as a drop-in replacement for pip and pip-tools. It focuses on speed, reliability, and ease of use rather than adding yet another layer of complexity. According to benchmarks from Astral, UV installs pac

15 Best AI Code Generators of 2025 (Reviewed) Cover

AI

Oct 17, 202521 min read

15 Best AI Code Generators of 2025 (Reviewed)

With most developers now relying on AI in their workflow, the question isn’t if you’ll use a code generator in 2025, but which one can deliver the most reliable, context-aware support. In just a few years, AI coding assistants have evolved from autocomplete tools to full-scale collaborators, capable of scaffolding projects, debugging complex systems, and even generating production-ready applications. Stack Overflow’s 2023 Developer Survey mentioned that nearly 70% of developers already use AI t

12 Replit Alternatives for Development in 2025 Cover

AI

Oct 15, 202512 min read

12 Replit Alternatives for Development in 2025

Is Replit still the best choice for cloud-based development in 2025? For years, Replit has been one of the most popular online IDEs, thanks to its instant setup, collaborative editing, and growing ecosystem of AI tools. For students and indie developers, it has often been the first stop for quick coding experiments. For teams, it has offered a fast way to collaborate without heavy local setups. But the developer ecosystem has changed. As projects scale, many find that Replit struggles with perf