Abstract: A system and method for the improved compression of audio signals and the restoration and enhancement of audio recordings missing high frequency content. In the preferred embodiment the different context models are applied to increase the compression ratio of spectral information, quantization coefficients and other information. Context models and arithmetic compression are used for final compression. The time-frequency amplitude envelope and degree of tonality parameters are extracted from the low frequency component. An estimate of the high frequency component is performed by applying a multiband distortion effect, waveshaping, to the low frequency content. Control of tonality is achieved by varying the number of bands within the multiband framework. A filterbank is used that roughly shapes the reconstructed high frequency component according to an estimation of the most probable shape.