Time-delay estimation process is developed in the transform domain where discrete cosine transform (DCT) coefficients of time-varying delay signals are estimated. The DCT is very efficient in compacting the signal energy in a small number of coefficients. Hence, estimation of time-varying delay is obtained through calculation of small number of DCT coefficients. Online maximum likelihood estimator of time-varying delay is developed in which coefficients of the transformed delay signal are obtained by maximizing the likelihood function in terms of these DCT coefficients. A systolic array architecture is designed to implement the developed algorithm. 2002 Elsevier Science Ltd. All rights reserved.