A method and system are provided for adaptively reducing noise in frames of digitized audio signals that may include both speech and background noise. Frames of digitized audio signals are processed to determine what attenuation (if any) should be applied to the current frame of digitized audio signals. Initially it is determined whether the current frame of digitized audio signals includes speech information, this determination being based upon an estimate of noise and on a speech threshold value. An attenuation value determined for the previous audio frame is modified based on this determination and applied to the current frame in order to minimize the background noise which thereby improves the quality of received speech. The attenuation applied to the audio frames is modified gradually on a frame-by-frame basis, each sample in a specific frame is attenuated using the value calculated for that frame. The adaptive noise reduction system may be advantageously applied to telecommunication systems in which portable radio transceivers communicate over RF channels because the adaptive noise reduction technique does not significantly increase data processing overhead.