A phoneme is the theoretical representation of a sound. It is a sound of a language as represented (or imagined) without reference to its position in a word or phrase. A phoneme, therefore, is the conception of a sound in the most neutral form possible and distinguishes between different words or morphemes — changing an element of a word from one phoneme to another produces either a different word or obvious nonsense.

Phonemes are not the physical segments themselves, but mental abstraction of them. A phoneme could be thought of as a family of related phones, called allophones, that the speakers of a language think of, and hear or see, as being categorically the same and differing only in the phonetic environment in which they occur. In sign languages, the basic movements were formerly called cheremes (or cheiremes), but usage changed to phoneme when it was recognized that the mental abstractions involved are essentially the same as in oral languages.

A phonemically "perfect" alphabet is one that has a single symbol for each phoneme. Although the concept has been fundamental to the development of phonological analysis of language beneath the level of the syllable, some linguists reject the theoretical validity of the phoneme. Some think that phonemes are more a product of literacy (i.e., the need to categorize the phonetics of a language in order to write it down systematically with a minimum number of letters). Other critics charge that the mind processes sub-phonemic elements of speech (e.g. features) in meaningful ways. A common test to determine whether two phones are allophones or separate phonemes relies on finding so-called minimal pair: words that differ only in the phones in question.