A system and method for DC balanced transition encoding. In some embodiments, the method includes: generating a set of candidate encoding keys for a set of raw data words; selecting a first encoding key, of the set of candidate encoding keys, based on a first disparity contribution; and encoding the raw data words with the first encoding key, the first disparity contribution being a difference between the number of ones and the number of zeros in the result of encoding the set of raw data words with the first encoding key.