A method for multifunctional processing of signals in frequency subbands performs subband decomposition and signal processing in two stages. A fullband signal is first splitted, with downsampling, into wide frequency subband (WFS) signals. Processing algorithms not requiring a high frequency resolution but benefiting from downsampling (such as subband acoustic echo cancellation), are applied to the WFS signals by wide subband processing blocks. Processed WFS signals are splitted, preferably without downsampling, into groups of narrow frequency subband (NFS) signals. The NFS signals are processed using processing algorithms (noise suppression, etc.) requiring a higher resolution. Processed NFS signals are synthesized into processed WFS signals, which are recombined into an output signal. Two-stage processing makes it possible to optimize signal processing, while keeping computational costs at low level and avoiding undesirable time delays. Preferred embodiments of the inventions are intended for use as an echo canceller/noise suppressor in voice communication terminals.