In this paper, a terrestrial digital multimedia broadcasting (T-DMB) multichannel audio broadcasting system based on spatial audio coding is presented. The proposed system provides realistic multichannel audio service via T-DMB with a small increase of data rate as well as backward compatibility with the conventional stereo-based T-DMB player. To reduce the data rate for additional multichannel audio signals, we compress the multichannel audio signals using the sound source location cue coding algorithm, which is an efficient parametric multichannel audio compression technique. For compatibility, we use the dependent property of an elementary stream descriptor, and this property should be ignored in a conventional T-DMB player. To verify the feasibility of the proposed system, we implement the T-DMB multichannel audio encoder and a prototype player. We perform a compatibility test using the T-DMB multichannel audio encoder and conventional T-DMB players. The test demonstrates that the proposed system is compatible with a conventional T-DMB player and that it can provide a promisingly rich audio service.