Precoding is a generalization of beamforming to support multi-stream (or multi-layer) transmission in multi-antenna wireless communications. In conventional single-stream beamforming, the same signal is emitted from each of the transmit antennas with appropriate weighting (phase and gain) such that the signal power is maximized at the receiver output. When the receiver has multiple antennas, single-stream beamforming cannot simultaneously maximize the signal level at all of the receive antennas. In order to maximize the throughput in multiple receive antenna systems, multi-stream transmission is generally required.

In point-to-point systems, precoding means that multiple data streams are emitted from the transmit antennas with independent and appropriate weightings such that the link throughput is maximized at the receiver output. In multi-user MIMO, the data streams are intended for different users (known as SDMA) and some measure of the total throughput (e.g., the sum performance or max-min fairness) is maximized. In point-to-point systems, some of the benefits of precoding can be realized without requiring channel state information at the transmitter, while such information is essential to handle the inter-user interference in multi-user systems. Precoding in the downlink of cellular networks, known as network MIMO or coordinated multipoint (CoMP), is a generalized form of multi-user MIMO that can be analyzed by the same mathematical techniques.