The instruction decoder of a processor is a combinatorial circuit sometimes in the form of a read-only memory, sometimes in the form of an ordinary combinatorial circuit. Its purpose is to translate an instruction code into the address in the micro memory where the micro code for the instruction starts.

In our example computer, the input to the instruction decoder is the low 5 bits of the data bus, for a total of 32 different instruction codes. The output is 6 bits to correspond to the width of the micro PC and the micro memory.