High-quality speech codec modules operating at 16 and 8 kb/s have been developed using an adaptive predictive coding with adaptive bit allocation (APC-AB) scheme. An optimized APC-AB algorithm is studied that reduces processing complexity while maintaining speech quality. The coding algorithm is implemented in two digital signal processors (DSPs). The DSP chips, a framing LSI circuit, a PCM codec, and some peripheral ICs are integrated in each of two compact packages, i.e. codec modules, operating at 16 or 8 kb/s. The codec module size is as small as 80 mm*50 mm*12 mm, and its typical power consumption is 500 mW using 2- mu m CMOS LSI technology. At 16 kb/s this APC-AB codec achieves high speech quality, close to that of a 7-bit mu -law PCM. The codec modules are expected to be used for various applications such as customer premises multiplexers for digital leased lines, digital mobile radio, and stored-and-forward-message systems (voice-mail systems).>