Abstract. This paper describes the trends in DSP (Digital Signal Processing) for telecommunications design at Bell Northern Research (BNR) 1 and the tools needed to address them. The paper is in three parts: First, we present the results of a three month survey of DSP design practices at BNR. We briefly describe the characteristics of the designs, as well as the DSP design tools used. However, the emphasis is on the main bottlenecks in the design process, and the tools required to address them in the future. Then, we present a proposal for a next generation DSP design environment for telecommunication applications, based on the survey results. Particular emphasis will be given to code generation, system-level simulation, and behavioral synthesis, the three most requested design tools. Finally, we provide a description of FlexWare, an embedded software development system which is being developed internally. This system addresses one important aspect of this next generation environment, namely design tools for application-specific instruction-set processors (ASIP). FlexWare is composed of two main components: CodeSyn, a retargetable microcode synthesis system; and Insulin, a VHDL-based instruction set simulation system.