The present invention provides an audio processing system with function of automatic gain control and method thereof. The method includes steps of: adjusting the default gain value to an adjusted gain value in response to a gain adjusting command; signaling a gain amplifier to amplify analog audio signals received from a digital/analog converter by the adjusted gain value; updating the default gain value with the adjusted gain value; updating the time period corresponding to a new current time thereby yielding an updated time period; reading a predetermined gain value referenced by the updated time period; calculating an integrated gain value according to the predetermined gain value referenced by the updated time period and the adjusted gain value; and updating the predetermined gain value referenced by the updated time period with the integrated gain value, thereby audio energy of the analog audio signals amplified is proper to a user's hearing.