This refers to how straight the chain runs between the front and rear sprockets. Ideally, both sprockets should be in the same plane, so that there is no sideward motion or stress to the chain. This constitutes "perfect chainline".

In the case of derailer geared bicycles, the chainline is not perfect in most gears. The worse the chainline, the worse the mechanical efficienty of the drive train.

"Correct" chainline for a derailer system is a matter of opinion, and depends on the intended use of the bicycle. There are two "simple" answers to the question of what constitutes proper chainline:

1. One view is that the middle of the cluster should line up with the middle chainring (or half-way between the two, in the case of a double.
2. From the parts manufacturers' point of view, the chainline depends on the diameter of the seat tube where the front derailer mounts. For fatter seat tubes where the front derailer is farther to the right, derailer manufacturers want the chainline to be farther to the right also, because their main priority is shifting performance, and their front derailers have an optimal chainline with respect to the edge of the seat tube. This is particularly a concern in the case of bicycles with indexed front shifting.

From the rider's point of view, chainline is partly dependent on how you are going to use your gears. For instance, consider a road triple vs a mountainbike triple:

• With a road triple, you mostly use the two bigger rings, the granny is only occasionally used, and only with the larger rear sprockets. For a road triple, having the cranks close-in is good, because it increases the usability of the big ring.
• With a mountain bike, the small ring is used much more often, and must often be used with fairly small sprockets to avoid having to shift the front under load. For mountain bikes, a more outboard chainwheel position is often preferable.

Chainline is measured from the centerline of the frame to the center of the chain.

You can measure the front chainline directly with a simple ruler. Simply hold the ruler against the seat tube or down tube and measure the distance to the middle of the chainring teeth. In the case of triple chainwheel sets, measure to the middle chainring. In the case of doubles, measure to the halfway point between the two rings.

If you need to adjust the front chainline, there are several different options to accomplish it:

• Change the Bottom Bracket

  Most bottom brackets made since the mid-'90s are symmetrical, they stick out the same amount on each side. If you replace your present bottom bracket with one that is, say, 4 mm shorter, it will move the chainline 2 mm to the left, because it will be 2 mm shorter on each side.

  If you go this route to a narrower chainline, make sure that there won't be a clearance problem between the frame and the crank or chainring.

• Bottom Bracket Spacer

  If you need to increase the chainline (move the chainring to the right) you can usually add a spacer washer between the right-side bottom bracket mounting ring (or cup) and the bottom bracket shell of the frame. The usual spacer for this is a Sturmey-Archer sprocket spacer. These fit all threaded bottom brackets except Italian size. Sorry, I don't know of any source for a spacer that will fit an Italian (36 mm) bottom bracket.
• 

  Chainring Spacers

  For a single chainring, you can add spacers between the chainring and the crank spider.

  If your chainring is mounted on the outside of the spider, you can move it to the rigtht this way. If it's mounteed on the inside of the spider, you can move it to the left as shown.

  This uses the same 10 mm I.D. spacers normally used on rear hub axles.

  Suitable spacers are available in 1, 2, and 3 mm thickness. You may need to use longer "double" stack bolts, especially for the 3 mm size.

• Phil Wood Bottom Brackets

  Phil Wood BBs are super quality, available in many different lengths, and they also feature the ability to adjust the chainline over a range of several millimeters.

  Phil Wood stuff is expensive, but it's the Very Best.

• Measure the frame spacing (or the over-lock-nut dimension of the hub , which should be the same.) (Example: 120 mm)
• Divide the result in half. (Example: 60 mm)
• Measure the distance from the inside of the rear fork end (or the outside of the axle locknut) to the middle of the sprocket. (Example: 18 mm)
• Subtract the dropout-to-sprocket spacing (Example: 18 mm) from the half-over-lock-nut dimension (Example: 60 mm) to determine the actual rear chainline (Example: 42 mm)

I have measured a selection of track sprockets, single freewheels and hubs with respect to chainline (units are millimeters.) The "Chainline" column is the distance from them mounting shoulder to the center line of the sprocket teeth.

To figure the actual chainline for a given combination, add the number from the "chainline" column of the sprocket or freewheel to the corrresponding "chainline" column of the hub chosen.

• Axle Re-Spacing/Re-Dishing

  This is the usual way to go for converting bikes from a multi-speed derailer setup to a single-speed fixed-gear or freewheel drive.

  The spacers are located just behind the outer locknuts, between the locknuts and the cones (or the bearing mounting nuts, if your hub uses cartridge bearings.) You will need cone wrenches and a general understanding of hub bearing adjustment to do this job.

  Assuming the rear hub's spacing already matches your frame's spacing, you can take spacer washers from one side of the hub and move them to the other side, thus shifting the entire hub from side to side. In the case of a hub originally meant for a multi-speed freewheel, there is usually a rather thick spacer on the right (freewheel) side of the hub. You can replace this with a stack of thinner spacer washers that add up to the same overall thickness, then distribute the washers from side to side as needed to get the chainline where you need it to be.

  Once you have done this, you'll need to re-dish the wheel by adjusting the spokes. This is a bit of trouble, but, in the casee of multi-to-single-speed conversion, the re-dishing actually results in making the wheel much stronger than it was.

  If you're using a flip-flop hub, re-spacing the axle will likely make the flip-flop feature unsuable, unless you also use a double chainring in front.

• Sprocket Dishing

  Most internal-gear hubs have "dished" sprockets that can be installed either dished in, or out, providing a choice of two different chainlines.

  Fixed-gear sprockets are usually intended to be installed with the flange facing inward, so the teeth are outboard. However, in many cases, it is possible to flip a fixed-gear sprocket over if you need to move the rear chainline to the left.

• Spacing Washers

  Sturmey-Archer internal-gear hubs generally have two 1/16" (1.6 mm) spacer washers next to the sprocket. These can be arranged in various ways, along with the dishing of the sprocket, to optimize chainline.

  These spacers also can be used with freewheels or fixed-gear sprockets, if there is sufficient thread engagement on the hub.

"Adjustable" means that the hubs use conventional threaded axles, so you can increase the OLD spacing by removing the locknuts and adding spacer washers.

If you add equal thicknesses to both sides, the chainline is unaffected, since it's measured from the middle outward.

If you add more spacers to one side, you can change the chainline, but if you do this with a double-sided hub, you will render it unusable on one side or the other, since you'll be increasing the chainline on one side while decreasing it on the other.