The present invention relates to an audio processing system with function of automatic gain control and method thereof. The method includes steps of: receiving a playing command to play an audio file; reading a genre type of the audio file from a tag of the audio file; reading a genre gain value of the genre type from a gain setting table stored in a storage unit; decoding the audio file and generating digital audio signals; converting the digital audio signals to analog audio signals; and signaling a gain amplifier to amplify the analog audio signals by the genre gain value, thereby sounds corresponding to the analog audio signals amplified is proper to a listener's hearing.