An audio band processor and a method and circuit for controlling its gain. The audio band processor comprises a first variable gain amplifier for receiving an analog audio signal; an analog to digital converter for converting the analog audio signal to a digital audio signal; and an interface circuit for encoding the digital audio signal. The interface circuit also arranges the digital audio signal into a sequence of encoded transmit frames, and receives a sequence of encoded receive frames, each receive frame comprising a predetermined number of encoded digital audio signal data bits and a predetermined number of digital gain control bits. The interface circuit also adjusts a gain level of the first variable gain amplifier in response to the digital gain control bits. In another embodiment, the audio band processor further comprises a second variable gain amplifier, and the interface circuit adjusts a gain level of the second variable gain amplifier in response to the digital gain control bits.