Beyond Tokens: Dynamic Latent Reasoning via Semantic Residual Refinement

Chain-of-Thought prompting has remarkably advanced LLM reasoning by generating explicit step-by-step tokens, yet its discrete nature inherently limits expressiveness and efficiency—struggling with abstract, ambiguous, or semantically divergent cognition beyond linguistic tokens. Latent reasoning offers a promising alternative by operating in the model’s internal continuous space for richer cognitive representations. However, existing methods typically rely on finetuning or token interpolation to bridge latent and input spaces, introducing training difficulty or semantic degradation. To this end, we propose Dynamic Latent Reasoning (DyLaR), a training-free framework that preserves semantic fidelity to latent space. DyLaR introduces a Semantic Residual Refinement module that progressively refines latent inputs by integrating semantic residuals from prior hidden states, thus capturing expressive semantic hierarchies that closely approximate continuous latent representations. To enhance flexibility, DyLaR further incorporates a dynamic switching policy that allows LLMs to alternate between discrete and latent reasoning based on model uncertainty—favoring explicit reasoning when confident, and latent exploration under ambiguity. Empirical experiments across knowledge- and reasoning-intensive tasks demonstrate that DyLaR consistently outperforms strong baselines in both effectiveness and token efficiency. Qualitative analyses further illustrate its interpretability and flexibility in navigating complex reasoning scenarios.