diff --git a/README.md b/README.md
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--- a/README.md
+++ b/README.md
@@ -385,6 +385,15 @@ pretraining_dataset: # hf path only
 
 </details>
 
+##### Template-Free
+
+- `input_output`: template-free prompt construction
+  ```json
+   {"segments": [{"label": true|false, "text": "..."}]}
+  ```
+
+This is a special format that allows you to construct prompts without using templates. This is for advanced users who want more freedom with prompt construction.  See [these docs](docs/input_output.md) for more details.
+
 ##### Conversation
 
 - `sharegpt`: conversations where `from` is `human`/`gpt`. (optional: first row with role `system` to override default system prompt)
diff --git a/docs/input_output.md b/docs/input_output.md
new file mode 100644
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@@ -0,0 +1,260 @@
+# Template-free prompt construction with the `input_output` format
+
+<!-- TOC -->
+
+- [Background](#background)
+    - [Masking Inputs](#masking-inputs)
+    - [You may not want prompt templates](#you-may-not-want-prompt-templates)
+    - [The `input_output` format](#the-input_output-format)
+- [Usage](#usage)
+    - [1. Prepare Data](#1-prepare-data)
+    - [2. Use `type: input_output`](#2-use-type-input_output)
+    - [3. Check the prompts](#3-check-the-prompts)
+
+<!-- /TOC -->
+
+<a id="markdown-background" name="background"></a>
+
+## Background
+
+<a id="markdown-masking-inputs" name="masking-inputs"></a>
+
+### Masking Inputs
+
+One of the most popular features of
+[axolotl](https://github.com/OpenAccess-AI-Collective/axolotl) is
+setting the following configuration value:
+
+
+```yaml
+train_on_inputs: false
+```
+
+If you declare a [dataset formats](https://github.com/OpenAccess-AI-Collective/axolotl?tab=readme-ov-file#dataset)
+such as `alpaca` or `chatml`, axolotl knows what is an input
+(i.e. human) vs. an output (i.e. the assistant) and masks the input
+labels so that your model can focus on predicting the outputs only.
+
+<a id="markdown-you-may-not-want-prompt-templates" name="you-may-not-want-prompt-templates"></a>
+
+### You may not want prompt templates
+
+However, there are many situations where you don't want to use one of
+these formats or templates (I usually don't!). This is because they can:
+
+-   Add unnecessary boilerplate to your prompts.
+-   Create artifacts like special delimiters `<|im_start|>` that can
+    quickly become footguns if you don't include them correctly at
+    inference time.
+-   Enforce a *chat* interface when you do not want one. Sometimes you
+    just want to fine-tune a model to a very specific task and do NOT
+    want multi-turn conversations, roles, etc.
+-   Limit you to only certain roles that the template allows.
+
+<a id="markdown-the-inputoutput-format" name="the-inputoutput-format"></a>
+
+### The `input_output` format
+
+You can construct your prompts without a template by using the
+`input_output` format, by setting `type: input_output` in your
+configuration file like this:
+
+**config.yml**
+
+```yaml
+train_on_inputs: false # Mask segments of your data
+datasets:
+  - path: output.jsonl
+    type: input_output  # use template free prompt construction
+```
+
+Unlike `type: completion`, which is also template-free,
+`type: input_output` allows you to mask segments of your text. More
+details on how this works are described below.
+
+<a id="markdown-usage" name="usage"></a>
+
+## Usage
+
+This is how you can use the `input_output` format:
+
+<a id="markdown-1-prepare-data" name="1-prepare-data"></a>
+
+### 1. Prepare Data
+
+To use the `input_output` format, collect your data in the following
+format into a jsonl file (below is the first row from the file
+`output`.jsonl` pretty printed):
+
+```bash
+$ head -n1 output.jsonl | python -m json.tool
+
+{.cell-output .cell-output-stdout}
+    {
+        "segments": [
+            {
+                "label": true,
+                "text": "<s>Hello\n"
+            },
+            {
+                "label": true,
+                "text": "hi there!. "
+            },
+            {
+                "label": false,
+                "text": "goodbye "
+            },
+            {
+                "label": true,
+                "text": "farewell</s>"
+            }
+        ]
+    }
+```
+
+Set `label:false` when you want to mask a segment of text so that the
+model isn't trained on it. Some things to keep in mind:
+
+> [!IMPORTANT]
+> 1.  **EOS, BOS, spaces, newlines etc. are entirely up to you. Axolotl
+    concatenates all the segments as-is.** The tokenizer doesn't add
+    anything additional. Notice how I added spaces, newlines, `<s>`
+    (BOS), and `</s>` (EOS) myself.
+> 2.  Make sure you check the materialized output to validate that the
+    prompt is getting assembled how you like.
+
+<a id="markdown-2-use-type-inputoutput" name="2-use-type-inputoutput"></a>
+
+### 2. Use `type: input_output`
+
+Let's materialize data with our `output.jsonl` file by setting
+`type: input_output` in our axolotl config:
+
+```yaml
+# training_config.yaml
+base_model: mistralai/Mistral-7B-v0.1
+data_seed: 49
+seed: 49
+
+datasets:
+  - path: output.jsonl
+    type: input_output
+val_set_size: 0.1
+
+sequence_len: 896
+sample_packing: false
+
+micro_batch_size: 2
+gradient_accumulation_steps: 3
+eval_batch_size: 2
+num_epochs: 1
+learning_rate: 0.0002
+
+train_on_inputs: false
+special_tokens:
+  bos_token: "<s>"
+  eos_token: "</s>"
+  unk_token: "<unk>"
+```
+
+You can use the following command to materialize your data. The
+`--debug` flag will print the tokens, along with the labels so you can
+verify that the correct items are being ignored:
+
+```bash
+$ python -m axolotl.cli.preprocess training_config.yaml --debug
+
+...
+[2024-03-05 23:36:46,969] [INFO] [axolotl.check_example_labels:35] [PID:607731] [RANK:0] <s>(1, 1) Hello(22557, 22557)
+(13, 13) hi(12014, 12014) there(736, 736) !(28808, 28808) .(28723, 28723) (28705, 28705) good(-100, 1179) bye(-100, 17664) (-100, 28705) fare(19111, 19111) well(5458, 5458) </s>(2, 2)
+
+```
+
+The format is `decoded_token`(`label`, `token_id`), for example,
+`<s>(1, 1)` means that the token is `<s>`, the label is `1` and the
+token_id is `1`. When the label is `-100` then that token is ignored for
+training.
+
+<a id="markdown-3-check-the-prompts" name="3-check-the-prompts"></a>
+
+### 3. Check the prompts
+
+Here is another way to check the materialized output:
+
+```python
+from transformers import AutoTokenizer
+from datasets import load_from_disk
+import yaml
+
+directory = !ls last_run_prepared/
+with open('training_config.yaml', 'r') as f:
+    cfg = yaml.safe_load(f)
+model_id = cfg['base_model']
+tok = AutoTokenizer.from_pretrained(model_id)
+ds = load_from_disk(f'last_run_prepared/{directory[0]}/')
+```
+
+```python
+>>> row = ds[0]
+>>> print(tok.decode(row['input_ids']))
+<s> Hello
+    hi there!.  goodbye  farewell</s>
+```
+
+We can check that the right tokens are ingored by comparing the labels
+to each token:
+
+```python
+import pandas as pd
+pd.DataFrame([{'token': tok.decode(i), 'label': l, 'id':i} for i,l in
+              zip(row['input_ids'], row['labels'])])
+```
+
+| token | label | id    |
+|-------|-------|-------|
+| 0     | \<s\> | 1     |
+| 1     | Hello | 22557 |
+| 2     | \\n   | 13    |
+| 3     | hi    | 12014 |
+| 4     | there | 736   |
+| 5     | !     | 28808 |
+| 6     | .     | 28723 |
+| 7     |       | 28705 |
+| 8     | good  | -100  |
+| 9     | bye   | -100  |
+| 10    |       | -100  |
+| 11    | fare  | 19111 |
+| 12    | well  | 5458  |
+| 13    | \</s\>| 2     |
+
+
+
+If we look at the input data, the above table seems correct! (The jsonl
+version is repeated below for reference):
+
+
+```bash
+$ head -n1 output.jsonl | python -m json.tool
+
+{.cell-output .cell-output-stdout}
+    {
+        "segments": [
+            {
+                "label": true,
+                "text": "<s>Hello\n"
+            },
+            {
+                "label": true,
+                "text": "hi there!. "
+            },
+            {
+                "label": false,
+                "text": "goodbye "
+            },
+            {
+                "label": true,
+                "text": "farewell</s>"
+            }
+        ]
+    }
+```