How the U.S. Postal Service Works

Postal ZIP Codes

From the 1940s to the early 1960s, the volume of mail — particularly business mail — grew significantly, and the need for a better system became apparent. On July 1, 1963, the USPS introduced the ZIP code (Zone Improvement Plan) system. In 1967, ZIP codes became mandatory on all mail.

A ZIP code is a five-digit number representing a specific location in the United States. The extended ZIP + 4 code, created in 1983, adds a hyphen and four additional digits for an even more precise location [source: Zip-Codes]. Here is how it works:

The first digit represents the state. Numbers increase as you move west. Several states share each digit — 2, for example, represents the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia.
The second and third digits represent regions within the state — the first three digits create the Sectional Center Facility (SCF) code. SCFs are the regional headquarters for mail sorting and distribution.
The fourth and fifth digits represent more specific areas, like post offices and postal delivery zones within a city or town.
ZIP + 4's extra four digits identify a specific segment of the five-digit delivery area — like a city block, office building or individual high-volume mail receiver. While five-digit ZIP codes are required on all mail, the extra four digits in ZIP + 4 are not.