ed according to this invention before they are reproduced so that no special playback equipment is required. Although two loudspeakers are required the sound produced is not the same as conventional stereophonic, left and right, sound however, stereo signals can be processed and improved according to this invention. The inventive sound processing involves dividing each monaural or single channel signal into two signals and then adjusting the differential phase and amplitude of the two channel signals on a frequency dependent basis in accordance with an empirically derived transfer function. The results of this is processing is that the apparent sound source location can be placed as desired, provided that the transfer function is properly derived. Each transfer function has an empirically derived phase and amplitude adjustment that is built-up for each predetermined frequency interval over the entire audio spectrum and provides for a separate sound source location. By providing a suitable number of different transfer functions and selecting them accordingly the sound source can appear to the listener to move. The transfer function can be implemented by analog circuit components or the monaural signal can be digitalized and digital filters and the like employed.