Abstract: In a system for processing stereo signals prior to application to an AM stereo channel information, the signals prior to broadcasting left channel and right channel automatic gain controllers are specially (L+R) gain controlled to maintain monaural loudness and are then followed by a low and high frequency equalizer and filter network. The system next transforms the audio into (L+R) and (L-R) signals and uses a multiband (L+R) and (L-R) peak limiting and clipping system with a variable gain (L-R) "stereo enhancement" amplifier located in the (L-R) path. The (L+R) and (L-R) audio is then applied to final peak clipping bandwidth filters. Finally, the (L+R) and (L-R) audio is transformed back into left and right audio which undergo left and right negative AGC'ing and peak clipping for decoding compatibility.