An efficient approach for estimating scalefactors for use in the quantization of audio signal spectrum values is described. The scalefactor estimation approach can be implemented in multiple stages. A first stage estimates a distortion level for a selected scalefactor band spectrum value based on a received maximum tolerant distortion threshold and the spectrum values in the scalefactor band. A second stage determines an interim process value based on the previously estimated distortion level and generates a scalefactor for a selected scalefactor band spectrum value based on the generated interim process value and a statistically predetermined fraction. A third stage generates a scalefactor that applies to the whole scalefactor band based on the scalefactor generated for the selected scalefactor band spectrum value. The approach provides a performance gain of 40% over previous techniques, thereby reducing device power requirements and audio encoder bottlenecks.