# CTRLS: Chain-of-Thought Reasoning via Latent State-Transition

arXiv: https://arxiv.org/abs/2507.08182 · HTML: https://mlsanity.com/paper/2507.08182/

## Key facts

- Cited by 14 papers in the map (data through 14 Oct 2026).
- Placed in Test-time compute and efficient thinking, one of 17 directions in LLM reasoning.
- Builds on 37 of its 42 references that are in the map.
- First posted on arXiv 10 Jul 2025.

## Placed in

- LLM reasoning / [Test-time compute and efficient thinking](https://mlsanity.com/lr/test-time-compute-and-efficient-thinking/)

## Builds on (most cited first, 30 of 37)

- [Training language models to follow instructions with human feedback](https://mlsanity.com/paper/2203.02155/) (2022)
- [The Llama 3 Herd of Models](https://mlsanity.com/paper/2407.21783/) (2024)
- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [Training Verifiers to Solve Math Word Problems](https://mlsanity.com/paper/2110.14168/) (2021)
- [Direct Preference Optimization: Your Language Model is Secretly a Reward Model](https://mlsanity.com/paper/2305.18290/) (2023)
- [Measuring Mathematical Problem Solving With the MATH Dataset](https://mlsanity.com/paper/2103.03874/) (2021)
- [Soft Actor-Critic: Off-Policy Maximum Entropy Deep Reinforcement Learning with a Stochastic Actor](https://mlsanity.com/paper/1801.01290/) (2018)
- [Large Language Models are Zero-Shot Reasoners](https://mlsanity.com/paper/2205.11916/) (2022)
- [Reflexion: Language Agents with Verbal Reinforcement Learning](https://mlsanity.com/paper/2303.11366/) (2023)
- [Let's Verify Step by Step](https://mlsanity.com/paper/2305.20050/) (2023)
- [Training a Helpful and Harmless Assistant with Reinforcement Learning from Human Feedback](https://mlsanity.com/paper/2204.05862/) (2022)
- [Continuous control with deep reinforcement learning](https://mlsanity.com/paper/1509.02971/) (2015)
- [Tree of Thoughts: Deliberate Problem Solving with Large Language Models](https://mlsanity.com/paper/2305.10601/) (2023)
- [Does Reinforcement Learning Really Incentivize Reasoning Capacity in LLMs Beyond the Base Model?](https://mlsanity.com/paper/2504.13837/) (2025)
- [Solving math word problems with process- and outcome-based feedback](https://mlsanity.com/paper/2211.14275/) (2022)
- [Training Large Language Models to Reason in a Continuous Latent Space](https://mlsanity.com/paper/2412.06769/) (2024)
- [A Distributional Perspective on Reinforcement Learning](https://mlsanity.com/paper/1707.06887/) (2017)
- [Implicit Quantile Networks for Distributional Reinforcement Learning](https://mlsanity.com/paper/1806.06923/) (2018)
- [Navigate through Enigmatic Labyrinth A Survey of Chain of Thought Reasoning: Advances, Frontiers and Future](https://mlsanity.com/paper/2309.15402/) (2023)
- [Planning with Large Language Models for Code Generation](https://mlsanity.com/paper/2303.05510/) (2023)
- [Crossing the Reward Bridge: Expanding RL with Verifiable Rewards Across Diverse Domains](https://mlsanity.com/paper/2503.23829/) (2025)
- [Verify-and-Edit: A Knowledge-Enhanced Chain-of-Thought Framework](https://mlsanity.com/paper/2305.03268/) (2023)
- [Deductive Verification of Chain-of-Thought Reasoning](https://mlsanity.com/paper/2306.03872/) (2023)
- [Soft Thinking: Unlocking the Reasoning Potential of LLMs in Continuous Concept Space](https://mlsanity.com/paper/2505.15778/) (2025)
- [Reinforcement Learning with Verifiable Rewards: GRPO's Effective Loss, Dynamics, and Success Amplification](https://mlsanity.com/paper/2503.06639/) (2025)
- [ToolChain*: Efficient Action Space Navigation in Large Language Models with A* Search](https://mlsanity.com/paper/2310.13227/) (2023)
- [Off-Dynamics Reinforcement Learning: Training for Transfer with Domain Classifiers](https://mlsanity.com/paper/2006.13916/) (2020)
- [Chain of Preference Optimization: Improving Chain-of-Thought Reasoning in LLMs](https://mlsanity.com/paper/2406.09136/) (2024)
- [Process Reward Models for LLM Agents: Practical Framework and Directions](https://mlsanity.com/paper/2502.10325/) (2025)
- [Towards a Mechanistic Interpretation of Multi-Step Reasoning Capabilities of Language Models](https://mlsanity.com/paper/2310.14491/) (2023)

## Built on by (most cited first, 14 of 14)

- [The Latent Space: Foundation, Evolution, Mechanism, Ability, and Outlook](https://mlsanity.com/paper/2604.02029/) (2026)
- [Explainable Chain-of-Thought Reasoning: An Empirical Analysis on State-Aware Reasoning Dynamics](https://mlsanity.com/paper/2509.00190/) (2025)
- [Skill-R1: Agent Skill Evolution via Reinforcement Learning](https://mlsanity.com/paper/2605.09359/) (2026)
- [WS-GRPO: Weakly-Supervised Group-Relative Policy Optimization for Rollout-Efficient Reasoning](https://mlsanity.com/paper/2602.17025/) (2026)
- [Generate, Filter, Control, Replay: A Comprehensive Survey of Rollout Strategies for LLM Reinforcement Learning](https://mlsanity.com/paper/2605.02913/) (2026)
- [StaRPO: Stability-Augmented Reinforcement Policy Optimization](https://mlsanity.com/paper/2604.08905/) (2026)
- [Stepwise Penalization for Length-Efficient Chain-of-Thought Reasoning](https://mlsanity.com/paper/2603.00296/) (2026)
- [OLIVIA: Online Learning via Inference-time Action Adaptation for Decision Making in LLM ReAct Agents](https://mlsanity.com/paper/2605.11169/) (2026)
- [D-Models and E-Models: Diversity-Stability Trade-offs in the Sampling Behavior of Large Language Models](https://mlsanity.com/paper/2601.17865/) (2026)
- [PRISM: A Dual View of LLM Reasoning through Semantic Flow and Latent Computation](https://mlsanity.com/paper/2603.22754/) (2026)
- [Skill-CMIB: Multimodal Agent Skill for Consistent Action via Conditional Multimodal Information Bottleneck](https://mlsanity.com/paper/2605.08526/) (2026)
- [Reasoning as State Transition: A Representational Analysis of Reasoning Evolution in Large Language Models](https://mlsanity.com/paper/2602.00770/) (2026)
- [Can We Break LLMs Out of Self-Loops? Fine-Grained Reasoning Control with Activation Steering](https://mlsanity.com/paper/2607.18100/) (2026)
- [A Taxonomy of Cognitive Capability Gaps in Generative and Agentic AI](https://mlsanity.com/paper/2608.02553/) (2026)

## Abstract (arXiv)

Chain-of-thought (CoT) reasoning enables large language models (LLMs) to break down complex problems into interpretable intermediate steps, significantly enhancing model transparency and performance in reasoning tasks. However, conventional CoT methods rely on heuristic sampling without structured modeling of reasoning transitions, constraining their ability to systematically explore and discover diverse and effective reasoning trajectories. In this work, we introduce CTRLS, a framework that formulates CoT reasoning as a Markov decision process (MDP) with latent state transitions, enabling principled and state-aware exploration via distributional reinforcement learning. By modelling reasoning actions as explicit probability distributions in latent space, our approach explicitly models epistemic uncertainty, facilitating robust exploration of the reasoning space. As part of our framework, we introduce an on-policy reinforcement learning strategy incorporating epsilon-greedy exploration and entropy-based regularization to iteratively refine latent state transitions without requiring additional fine-tuning of the underlying LLM. Theoretical analyses provide evidence lower bounds (ELBO), theoretically grounding our transition-aware modeling of latent reasoning dynamics. Further experiments demonstrate improvements in reasoning accuracy, diversity, and exploration efficiency across benchmark reasoning tasks.