Residual Connections and the Causal Shift: Uncovering a Structural Misalignment in Transformers

Recent methods in language model interpretability employ techniques such as sparse autoencoders to decompose residual stream contributions into linear, semantically meaningful features. Such methods are commonly interpreted as identifying features that persist in the residual stream and that subsequent layers build upon. We challenge this view by identifying the Transformer Layer Correction Mechanism (TLCM), wherein adjacent transformer layers systematically counteract portions of each other's contributions. TLCM appears in 5 out of 7 major open-source model families and activates across nearly all tokens in diverse texts. We show that TLCM emerges during pretraining, operates most strongly on contextually dependent tokens, and adaptively calibrates its correction strength based on the preceding layer's output. Using the layer Jacobian, we further show that TLCM selectively corrects specific subspaces while reinforcing others, which we interpret through a ``propose-and-reject'' framework in which layers propose candidate features and subsequent layers selectively remove inappropriate ones. This dynamic suggests that the residual stream at any layer contains transient proposals alongside persistent features, helping explain why SAE feature descriptions often have low specificity, why effective model steering requires extreme feature amplification, and why transcoders hold a theoretical advantage over SAEs.

In contrast to RNNs, which compress their history into a single hidden state, Transformers can attend to all past tokens directly. However, standard Transformers rely solely on the hidden state from the previous layer to represent the entire context. We show that this design creates pressure toward representation collapse and can degrade performance. To address this issue, we introduce Layer-Integrated Memory (LIMe), a lightweight extension that leverages existing key-value buffers and learns per-head, per-layer routing weights to integrate representations from previous layers. Across language modeling, synthetic reasoning, and deep architectures, LIMe improves perplexity per FLOP in the studied regimes and yields strong gains on synthetic tasks while preserving higher value-vector entropy and token separability. Finally, learned routing weights reveal systematic reuse of local and long-distance features, showing how LIMe enriches attention-time memory without increasing hidden-state size. Code is available at https://github.com/corl-team/lime.

We study Latent Recurrent Transformer (LRT), a lightweight augmentation of autoregressive transformers that reuses a high-level source-layer hidden state from the previous token as recurrent memory for the next token. Because this state is already computed during ordinary decoding, LRT introduces a cross-token, cross-layer latent pathway while preserving the standard attention mechanism, KV-cache interface, and one model forward per generated token. To pretrain this recurrence without sequentially unrolling the full sequence, we introduce interleaved parallel training: one full-sequence initialization forward constructs a shared buffer, followed by sequential refinement of disjoint position subsets with parallel computation within each subset. This provides every token with recurrent-memory-aware supervision at approximately 2x ideal token compute. Across 1.3B- and 2.1B-parameter nanochat-style backbones and a wide range of training budgets, LRT improves both BPB and CORE under matched effective compute. Additionally, LRT outperforms two-forward PonderLM-2 and matches a three-loop Transformer in BPB, while retaining one-forward-per-token decoding with 9% latency overhead over the standard Transformer.