This paper discusses the application of the Set Partitioning In Hierarchical Trees (SPIHT) algorithm to the compression of audio signals. Simultaneous masking is used to reduce the number of coefficients required for the representation of the audio signal. The proposed scheme is based on the combination of the Modulated Lapped Transform (MLT) and SPIHT. Comparisons are also made with the Discrete Wavelet Transform (DWT) based scheme. Results presented reveal the compression achieved as well as the scalability of the proposed coding scheme. The MLT based scheme is shown to have compression performance that is superior to the DWT based scheme.