This paper introduces the Sparse Tsetlin Machine (STM), a novel Tsetlin Machine (TM) that processes sparse data efficiently. Traditionally, the TM does not consider data characteristics such as sparsity, commonly seen in NLP applications and other bag-of-word-based representations. Consequently, a TM must initialize, store, and process a significant number of zero values, resulting in excessive memory usage and computational time. Previous attempts at creating a sparse TM have predominantly been unsuccessful, primarily due to their inability to identify which literals are sufficient for TM training. By introducing Active Literals (AL), the STM can focus exclusively on literals that actively contribute to the current data representation, significantly decreasing memory footprint and computational time while demonstrating competitive classification performance.