This book is a result of Master of Philosophy (M.Phil.) research at Jawaharlal Nehru University’s Special Centre for Sanskrit Studies during 2007-09. Processing sandhi in Sanskrit by computers is more difficult than most other languages due to its complex system. The book has four chapters. The first chapter is purely theoretical and discusses in detail the morphology, phonology and morphophonemics followed by a survey in related area. Before implementing as a program, grammar rules are required to be represented in a formal notation. The second chapter of the book categorizes the Sanskrit sandhi rules on a different basis and represents all the rules in a formal notation. The third chapter of the book explains the process of developing automatic sandhi analyzer for Sanskrit and various underlying issues and the fourth chapter explains the implementation of the system. The sandhi analysis system introduced in this book is live on computational linguistics website of Special Centre for Sanskrit Studies, JNU (http://sanskrit.jnu.ac.in/sandhi/viccheda.jsp). This centre has been involved in Language Technology research and development for Sanskrit and other Indian languages since 2002.