A system and method to improve the quality of coded speech coexisting with background noise. For instance, the present invention receives a coded speech signal via a communication network and then decodes and synthesizes the different parameters contained within it to produce a synthesized speech signal. The present invention determines the non-speech periods that are represented within the synthesized speech signal. The determined non-speech periods are then utilized to determine and code LPC parameters needed for background noise synthesis. Because medium or low bit rate LPC-coded speech during voice activity periods has the coexisting background noise attenuated, the decoded signal has audible abrupt changes in the level of the background noise. To improve decoded speech quality, the present invention adds simulated background noise to decoded noisy speech when synthesizing the noisy speech signal during voice activity periods. The resulting output signal sounds more natural and realistic to the human ear because of the continuous presence of background noise during speech and non-speech periods.