Overview
MLT-3 encoding is a line code that uses three voltage levels. An MLT-3 interface emits less electromagnetic interference and requires less bandwidth than most other binary or ternary interfaces that operate at the same bit rate, such as Manchester code or Alternate Mark Inversion.

MLT-3 encoding (Multi-Level Transmit) is a line code (a signaling method used in a telecommunication system for transmission purposes) that uses three voltage levels. An MLT-3 interface emits less electromagnetic interference and requires less bandwidth than most other binary or ternary interfaces that operate at the same bit rate (see PCM for discussion on bandwidth / quantization tradeoffs), such as Manchester code or Alternate Mark Inversion.

MLT-3 cycles sequentially through the voltage levels −1, 0, +1, 0. It moves to the next state to transmit a 1 bit, and stays in the same state to transmit a 0 bit. Similar to simple NRZ encoding, MLT-3 has a coding efficiency of 1 bit/baud, however it requires four transitions (baud) to complete a full cycle (from low-to-middle, middle-to-high, high-to-middle, middle-to-low). Thus, the maximum fundamental frequency is reduced to one fourth of the baud rate. This makes signal transmission more amenable to copper wires.
The lack of transition on a 0 bit means that for practical use, the number of consecutive 0 bits in the transmitted data must be bounded; i.e. it must be pre-coded using a run-length limited code. This results in an effective bitrate slightly lower than one bit per baud or four bits per cycle.
MLT-3 was first introduced[when?] by Crescendo Communications[1] as a coding scheme for FDDI copper interconnect (TP-PMD,[2] a.k.a. CDDI). Later,[when?] the same technology was used in the 100BASE-TX physical medium dependent sublayer, given the considerable similarities between FDDI and 100BASE-[TF]X physical media attachment layer (section 25.3 of IEEE802.3-2002 specifies that ANSI X3.263:1995 TP-PMD should be consulted, with minor exceptions).
Signaling specified by 100BASE-T4 Ethernet, while it has three levels, is not compatible with MLT-3. It uses selective base-2 to base-3 conversion with direct mapping of base-3 digits to line levels (8B6T code).