Abstract: The circuit complexity of a closed-loop echo cancellation system for use in a two-way communication circuit is reduced by employing a second adjustable signal processing network of the transversal type positioned in the control loop to emulate the characteristic of a recursive adjustable signal processing network. The two signal processing networks in the control loop are adjusted simultaneously to effect echo cancellation. The second signal processing network compensates for the effect of transmission poles in the echo return path and reduces the duration of the impulse response of the echo return path significantly so that the first signal processing network in the control loop is greatly simplified. A third signal processing network of the recursive type is adjusted in accordance with the internal settings of the second network to perform signal processing inverse to that of the second network.