A digital speech coder has been designed for real‐time operation at a data rate of 9.6 kb/s. The design is based on a combination of two speech compression techniques: Time‐Domain Harmonic Scaling (tdhs) and Sub‐Band Coding (sbc). It is a highly modularized hardware implementation using five Bell Laboratories Digital Signal Processor (dsp) integrated circuits as the key processing elements. Three dsps are used in the encoder for pitch detection, tdhs compression, and sub‐band encoding. Another two dsps are used in the receiver for sub‐band decoding and tdhs expansion. In this paper we describe the overall design of the system and discuss some of the techniques used to realize it in the dsp hardware in real time. General issues of the algorithm design, software implementation, and hardware design are considered.