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.

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