Large Language Models (LLMs) incur significant computational and memory costs when processing long prompts, as full self-attention scales quadratically with input length. Token compression aims to address this challenge by reducing the number of tokens representing inputs. However, existing prompt-compression approaches primarily operate in token space and overlook inefficiencies in the latent embedding space. In this paper, we propose K-Token Merging, a latent-space compression framework that merges each contiguous block of K token embeddings into a single embedding via a lightweight encoder. The compressed sequence is processed by a LoRA-adapted LLM, while generation remains in the original vocabulary. Experiments on structural reasoning (Textualized Tree), sentiment classification (Amazon Reviews), and code editing (CommitPackFT) show that K-Token Merging lies on the Pareto frontier of performance vs. compression, achieving up to 75% input length reduction with minimal performance degradation. Code is available at https://github.com/shsjxzh/K-Token-Merging.
@article{arxiv.2604.15153,
title = {Compressing Sequences in the Latent Embedding Space: $K$-Token Merging for Large Language Models},
author = {Zihao Xu and John Harvill and Ziwei Fan and Yizhou Sun and Hao Ding and Hao Wang},
journal= {arXiv preprint arXiv:2604.15153},
year = {2026}
}