An audio enhancement system for compensating for ambient noise in a listening environment, comprises an audio system that produces an electrical sound signal and generates a sound output from the electrical sound signal. A sensor (e.g., a microphone) senses a total sound signal representative of the total sound level in the listening environment, including the sound output from the audio system and the ambient noise within the listening environment. A processing unit responsive to the total sound signal and the electrical sound signal extracts from the total sound signal an ambient noise signal representative of the ambient noise in the listening environment. A controller responsive to the ambient noise signal performs a linear predictive coding (LPC) analysis and generates a control signal, which is input to an equalizer to adjust the sound output of the audio system in order to compensate for the ambient noise level.