In this paper, we described the implementation and the sound quality assessment of a real-time stereo audio codec using TMS320C40 DSP (digital signal processing) chip for low bitrte and high quality audio. We implemented hardware and software in order to overcome a real-time processing problem of audio compression algorithm that can be produced by largely recursive computing and complexity of the process. We have studied five types of distortion that can be produced by perceptual coding and the codec was evaluated by eight test musics that are selected in SQAM (sound quality assessment material) 422-2-4-2 produced by EBU (european broadcast union). The subjective listening tests were carried out on the codec quality and preformance by double blind method in a listening room with eleven listeners. As a result, 5 grade-impairment scale was scored under minus one and the codec quality was evaluated to be perceptible, but not annoying.