An adaptive hybrid circuit for use in a digital telephone switching system is disclosed. The hybrid circuit is adaptive in that it provides cancellation of a far end talker power component in an output signal having both far end talker and near end talker power components. The circuit includes first and second transfer filters for matching loaded and non-loaded subscriber loops, respectively, in the telephone system. The circuit generates a filtered signal representing the difference between loaded and non-loaded subscriber impedances in the telephone system and generates an adaptive control signal responsive to the filtered signal and the output signal such that the far end talker power component is cancelled.