Abstract: A multipath interference reduction system and method for smoothly reducing noise associated with FM stereo signal reception with an adjustable blend. The system includes a peak detector for detecting noise present in the received signal. When the detected noise exceeds a first threshold limit, stereo separation reduction is provided. The amount of stereo separation reduction may be adjusted so as to provide a greater reduction at higher noise frequencies than at lower noise frequencies to enhance the audio sound. When the determined noise exceeds a second higher threshold limit, stereo separation is further reduced to provide primarily monoaural reception.