An active noise reduction system comprising: an earphone to be acoustically coupled to a user's ear which is exposed to ambient noise originating from a noise source , the earphone comprises a cup-like housing with an aperture ; a transmitting transducer which converts electrical signals into acoustical signals to be radiated to the user's ear and which is arranged at the aperture of the cup-like housing thereby defining an earphone cavity ; and a receiving transducer which converts acoustical signals into electrical signals; a first acoustical path which extends from the transmitting transducer to the ear and which has a first transfer characteristic (H SE (z)); a second acoustical path which extends from the transmitting transducer to the receiving transducer and which has a second transfer characteristic (H SM (z)); and a control unit which is electrically connected to the receiving transducer and the transmitting transducer and which compensates for the ambient noise , defined by a signal N[n], by generating a noise reducing electrical signal (N*[n]) supplied to the transmitting transducer , where the noise reducing electrical signal (N*[n]) is derived from the receiving-transducer signal (e[n]) filtered with a third transfer characteristic (H* SM (z)) and where the second and third transfer characteristics (H SM (z), H* SM (z)) together model the first transfer characteristic (H SE (z)) characterized in that the receiving transducer is an error microphone and is configured to be arranged between the transmitting transducer and the noise source, when the user's ear is exposed to the ambient noise . an earphone to be acoustically coupled to a user's ear which is exposed to ambient noise originating from a noise source , the earphone comprises a cup-like housing with an aperture ; a transmitting transducer which converts electrical signals into acoustical signals to be radiated to the user's ear and which is arranged at the aperture of the cup-like housing thereby defining an earphone cavity ; and a receiving transducer which converts acoustical signals into electrical signals; a first acoustical path which extends from the transmitting transducer to the ear and which has a first transfer characteristic (H SE (z)); a second acoustical path which extends from the transmitting transducer to the receiving transducer and which has a second transfer characteristic (H SM (z)); and a control unit which is electrically connected to the receiving transducer and the transmitting transducer and which compensates for the ambient noise , defined by a signal N[n], by generating a noise reducing electrical signal (N*[n]) supplied to the transmitting transducer , where the noise reducing electrical signal (N*[n]) is derived from the receiving-transducer signal (e[n]) filtered with a third transfer characteristic (H* SM (z)) and where the second and third transfer characteristics (H SM (z), H* SM (z)) together model the first transfer characteristic (H SE (z)) characterized in that the receiving transducer is an error microphone and is configured to be arranged between the transmitting transducer and the noise source, when the user's ear is exposed to the ambient noise . <EOS>