A headphone accessory for use with a portable audio device and headphones. The headphone accessory includes an audio source input for receiving audio signals from an audio device. An audio sound transducer receives external sounds and converts the external sound to external sound signals. A signal mixer for continuously varies the balance of a source audio volume to an external sound volume. The signal mixer mixes the volume-adjusted source audio signals with volume-adjusted external sound signals. An audio output outputs the mixed source audio and external sound signals.