A binaural signal processing circuit comprising a first system for imparting an input signal with a transfer characteristic equal to the transfer characteristic hL(t; .theta., r) from a sound source to the left ear of a listener, where .theta. represents an angle between the front direction of the listener and the sound source, and r represents a distance between the sound source and the listener, a second system for imparting the input signal with a transfer characteristic equal to the transfer characteristic hR(t; .theta., r) from the sound source to the right ear of the listener, a system for variably controlling the transfer functions of the first and second transfer function imparting systems, and a further system for deriving binaural signals from the first and second transfer function imparting systems.