An audio enhancement system for automatically controlling a timbre and equalization of sound in a listening room, comprising: a time-to-frequency transform block configured to receive a first electrical sound signal (x[k]) in a time domain and to generate a second electrical sound signal (X(ω)) in a frequency domain; a frequency-to-time transform block configured to receive a spectral gain adjusted second electrical sound signal (Out(ω)) in the frequency domain and to generate a re-transformed electrical sound signal (Out[k]) in the time domain; a loudspeaker configured to generate a sound output (e[k]) from the re-transformed electrical sound signal (Out[k]); a microphone configured to generate a total sound signal (d[k]) representative of a total sound in the listening room, wherein the total sound comprises the sound output (e[k]) from the loudspeaker and ambient noise within the listening room; a noise extraction block configured to receive the total sound signal (d[k]) from the microphone and to extract an estimated ambient noise signal representative of the ambient noise (n[k]) in the listening room from the total sound signal (d[k]), wherein an adaptive filter estimates a transfer function (H(z)) from loudspeaker to microphone output as estimated room data (W(ω)); and an equalization block configured to receive the estimated ambient noise signal and the second electrical sound signal (X(ω)) in the frequency domain and to adjust a spectral gain (G(ω)) of the second electrical sound signal (X(ω)) in the frequency domain dependent on the estimated ambient noise signal and a room dependent gain signal (G room (ω)); thereby generating the spectral gain adjusted second electrical sound signal (Out(ω)) wherein the room dependent gain signal (G room (ω)) is determined from reference room data (W ref (ω)) and the estimated room data (W(ω)). a time-to-frequency transform block configured to receive a first electrical sound signal (x[k]) in a time domain and to generate a second electrical sound signal (X(ω)) in a frequency domain; a frequency-to-time transform block configured to receive a spectral gain adjusted second electrical sound signal (Out(ω)) in the frequency domain and to generate a re-transformed electrical sound signal (Out[k]) in the time domain; a loudspeaker configured to generate a sound output (e[k]) from the re-transformed electrical sound signal (Out[k]); a microphone configured to generate a total sound signal (d[k]) representative of a total sound in the listening room, wherein the total sound comprises the sound output (e[k]) from the loudspeaker and ambient noise within the listening room; a noise extraction block configured to receive the total sound signal (d[k]) from the microphone and to extract an estimated ambient noise signal representative of the ambient noise (n[k]) in the listening room from the total sound signal (d[k]), wherein an adaptive filter estimates a transfer function (H(z)) from loudspeaker to microphone output as estimated room data (W(ω)); and an equalization block configured to receive the estimated ambient noise signal and the second electrical sound signal (X(ω)) in the frequency domain and to adjust a spectral gain (G(ω)) of the second electrical sound signal (X(ω)) in the frequency domain dependent on the estimated ambient noise signal and a room dependent gain signal (G room (ω)); thereby generating the spectral gain adjusted second electrical sound signal (Out(ω)) wherein the room dependent gain signal (G room (ω)) is determined from reference room data (W ref (ω)) and the estimated room data (W(ω)).