A code replaces an entire word or phrase with a word or group of letters previously agreed upon by the sender and the receiver. (Code: "Red dog died last night." Actual message: "Enemy aircraft observed over West Coast.") Matching code books enabled both sender and recipient to encode and decode messages.

A cipher changes individual letters or numbers in a message one by one. In a transportation cipher, letters are rearranged according to a preset pattern. In substitution cipher, letters are replaced by other letters, according to a secret alphabet.