A signal conditioning circuit dynamically adjusts a compression ratio, so as to compress a signal and avoid limiting to the extent possible, thereby avoiding distorting the signal by clipping. An input signal is applied to the input of a programmed gain amplifier (PGA) or other amplifier whose gain can be controlled by a gain control signal. The input or the output of the PGA is sampled by a level detector to produce a level signal that represents the level of the signal. A variable source produces a variable threshold signal. A comparator compares the level signal to the variable threshold signal to produce a difference signal. Control logic generates the gain control signal from the difference signal. When the level signal exceeds the threshold signal, the control logic alters the gain control signal to reduce the gain of the PGA, and when the level signal is less than the threshold signal, the control logic alters the gain control signal to increase the gain of the PGA. The threshold signal varies as a function of the gain control signal.