Swiss Linguist Ferdinand de Saussure propounded the sign theory of language, which was published as class notes by his students posthumously in the book Cours de Linguistique Generale (Course in General Linguistics) in the year 1916.

According to Saussure, language is nothing but a complex system of signs. By a sign, we mean something that stands for an idea or a concept. For example red color is an indicator of danger, green light stands for go, etc.

Let us explain main points of Saussure's sign theory using a simplified example. If we want to represent anything like “tree” (just imagine the brown trunk structure with green leaves, flowers, etc. that you have already seen in parks or elsewhere), we simply write a word with four letters: t-r-e-e.

Now, these four written letters (t-r-e-e) can be called as signifiers as they signify a “concept”, i.e. the actual, physical tree (that you imagine looking at these letters). Note that these individual letters (just say the letter “t”) are also signs that combine to form the signifier “tree”. This is the first point of his theory.

Also, the relationship between signifier and signified is arbitrary, i.e. there is no real, understandable relationship between the sign and what it signfies. Have you ever thought why these four letters t-r-e-e only represent the concept “tree”?  There is nothing in the word itself or letters that looks like or resembles the actual tree. It is purely a matter of convention. Each community chooses to say and follow these conventions. This is why every concept is called with different names in different languages.

The specific features of de Saussure's sign theory of language seeks to rest on two elements that prompt a great deal of thought and inquiry.  For de Saussure, the sign theory of how language operates in terms of the dynamics of signifier and signified becomes incredibly important.  It is this element of combining both the verbal development of language and what language signifies to the social group that helps to form the basis of de Saussure's sign theory of language.  

de Saussure's point was that in foreign languages, one of his speciality, different words signify the same experience even through they are not near one another.  The German word for "Dog" is vastly different from the Spanish word for "Dog."  ("Hund" and "Perro.")  Yet, they both end up meaning the same construction for what we consider to be the animal.  de Saussure suggests that language has a signified function in that the specific use of language refers to a specific signified meaning that is shared.  The sign theory of language rests upon the understanding of both signifier and signified.  This is a distinctive feature of the de Saussure's sign theory of language.