The present invention relates to an audio processing system and method for automatically adjusting volume. The method includes steps of: calculating a noise level as a reference noise level; periodically calculating a new noise level of a predetermined time period, and dividing the reference noise level by the new noise level to obtain a ratio; sampling digital audio signals generated by a decoding unit to obtain a plurality of amplitude values, periodically calculating an audio energy value of the predetermined time period; multiplying the audio energy value by the ratio to obtain a reference audio energy value; calculating a gain value according to the reference audio energy value and the default gain value; updating the default gain value with the gain value; and signaling the gain amplifier to amplify the analog audio signals received with the gain value, thereby protecting users' hearing.