An acoustic signal processing system and method includes classification technology to classify a relationship between at least two sound components of a received sound signal. The exemplary sound components are ambient noise and localized noise. The classification technology dynamically determines a classification value that represents the relationship between the sound components and processes the sound signal in accordance with the acoustic signal classification to modify the sound signal. In at least one embodiment, dynamic classification of the relationship between sound components in a sound signal and responsive signal processing improve performance of systems, such as an active noise cancellation (ANC) system, by, for example, attenuating at least one of the sound components and/or enhancing at least one of the sound components. In an ANC system context, the sound components generally include noise components such as ambient noise and noise localized to a microphone.