Chunking is the recoding of smaller units of information into larger, familiar units. Chunking is often assumed to help bypassing the limited capacity of working memory (WM). We investigate how chunks are used in WM tasks, addressing three questions: (a) Does chunking reduce the load on WM? Across four experiments chunking benefits were found not only for recall of the chunked but also of other not-chunked information concurrently held in WM, supporting the assumption that chunking reduces load. (b) Is the chunking benefit independent of chunk size? The chunking benefit was independent of chunk size only if the chunks were composed of unique elements, so that each chunk could be replaced by its first element (Experiment 1), but not when several chunks consisted of overlapping sets of elements, disabling this replacement strategy (Experiments 2 and 3). The chunk-size effect is not due to differences in rehearsal duration as it persisted when participants were required to perform articulatory suppression (Experiment 3). Hence, WM capacity is not limited to a fixed number of chunks regardless of their size. (c) Does the chunking benefit depend on the serial position of the chunk? Chunks in early list positions improved recall of other, not-chunked material, but chunks at the end of the list did not. We conclude that a chunk reduces the load on WM via retrieval of a compact chunk representation from long-term memory that replaces the representations of individual elements of the chunk. This frees up capacity for subsequently encoded material.