A system and method is described for estimating residual echo and performing residual echo suppression on a signal. In particular, the system and method described herein: 1) provides a more accurate coherence-based approach where the sub-band nature of coherence-based residual echo estimation is leveraged using sub-band-based coherence measures and upper-bound envelopes to guide residual echo estimates; 2) provides joint estimation of the residual echo and a background stationary noise-floor; 3) provides more accurate residual echo estimation by combining the above two measures with information on near-end activity to selectively adjust the residual-echo estimation in sub-bands; and 4) provides improved control of near-end distortion by leveraging the noise-floor estimate and the internally calculated signal-to-echo ratios as additional guides/limits to help balance, flexibly, and as needed, near-end distortion with residual echo suppression. The resultant residual echo suppressor design provides significant improvement in both residual echo suppression and background noise preservation.