Abstract The sharp increase in next-generation sequencing technologies’ capacity has created a demand for algorithms capable of quickly searching a large corpus of biological sequences. The complexity of biological variability and the magnitude of existing data sets have impeded finding algorithms with guaranteed accuracy that efficiently run in practice. Our main contribution is the Tensor Sketch method that efficiently and accurately estimates edit distances. In our experiments, Tensor Sketch had 0.956 Spearman’s rank correlation with the exact edit distance, improving its best competitor Ordered MinHash by 23%, while running almost 5 times faster. Finally, all sketches can be updated dynamically if the input is a sequence stream, making it appealing for large-scale applications where data cannot fit into memory. Conceptually, our approach has three steps: 1) represent sequences as tensors over their sub-sequences, 2) apply tensor sketching that preserves tensor inner products, 3) implicitly compute the sketch. The sub-sequences, which are not necessarily contiguous pieces of the sequence, allow us to outperform k -mer-based methods, such as min-hash sketching over a set of k -mers. Typically, the number of sub-sequences grows exponentially with the sub-sequence length, introducing both memory and time overheads. We directly address this problem in steps 2 and 3 of our method. While the sketching of rank-1 or super-symmetric tensors is known to admit efficient sketching, the sub-sequence tensor does not satisfy either of these properties. Hence, we propose a new sketching scheme that completely avoids the need for constructing the ambient space. Our tensor-sketching technique’s main advantages are three-fold: 1) Tensor Sketch has higher accuracy than any of the other assessed sketching methods used in practice. 2) All sketches can be computed in a streaming fashion, leading to significant time and memory savings when there is overlap between input sequences. 3) It is straightforward to extend tensor sketching to different settings leading to efficient methods for related sequence analysis tasks. We view tensor sketching as a framework to tackle a wide range of relevant bioinformatics problems, and we are confident that it can bring significant improvements for applications based on edit distance estimation.