A system for reducing an echo and/or a residual echo in a microphone output signal includes an echo compensation filter configured to receive audio input signals and generate an estimated echo signal. A speech activity detector is configured to detect speech of a local speaker, and a combining circuit is configured to generate an echo compensated signal by subtracting the estimated echo signal from the microphone output signal. A residual echo reduction circuit is configured to suppress the residual echo in the echo compensated signal based on the detected speech activity, and output an echo suppressed output signal. The echo reduction system may reduce local background noise and residual echoes in a microphone output signal so that local speech may be transmitted free from undesirable signals.