An MPEG-2/4 AAC decoder on 16-bit fixed-point processor is presented in this paper. To meet audio quality criteria, despite small word length, special design methods for 16-bit foxed-point AAC decoder were devised. This paper presents particular algorithms for 16-bit AAC decoding. We have implemented an efficient AAC decoder using the proposed algorithms. Audio contents can be replayed in the decoder without quality degradation.