This chapter is focused on developing the basic notion of Shannon entropy, its interpretation in terms of distinctions, i.e., the minimum average number of yes-or-no questions that must be answered to distinguish all the “messages.” Thus Shannon entropy is also a quantitative indicator of information-as-distinctions, and, accordingly, a “dit-bit transform” is defined that turns any simple, joint, conditional, or mutual logical entropy into the corresponding notion of Shannon entropy. One of the delicate points is that while logical entropy is always a non-negative measure in the sense of measure theory (indeed, a probability measure), we will later see that for three or more random variables, the Shannon mutual information can be negative. This means that Shannon entropy can in general be characterized only as a signed measure, i.e., a measure that can take on negative values.