A compact binary encoding technique for information that is logically hierarchically structured, such as XML data, maintains all of the features of XML data in a useable form, such as the hierarchical structure underlying the data. Hence, data encoded in this format can undergo XML-based processing on-the-fly as it is being received or fetched, as if the data was being processed linearly in its textual character-based format. Processing of data encoded in this format can begin without having to wait for and decode the entire data set. The overhead due to XML tags is significantly minimized. The encoded data can be processed more efficiently because the data is pre-parsed. Values may be stored in their native type formats and, therefore, processing of the encoded data avoids costly type conversions. Further, any available structural constraint information can be effectively exploited.