An interactive 3-D sound processing system and its implementation is described, which is to provide virtual auditory environments to listeners. While conventional 3-D sound processing systems require high performance workstations or large DSP arrays, the proposed system is reduced in hardware size for practical applications. The proposed system is implemented using a prevailing IBM-compatible PC and a single DSP. Since the organization of the proposed system is independent of implementation details such as operation precision and number of audio tracks, the proposed system can be ported to various hardware entities. In addition, an easy-to-use user interface is also implemented on PC software for realtime input of 3-D sound movement. Owing to these features, the presented system is valuable as a prototype for various implementation of 3-D sound processing systems, while the current implementation is useful as a 3-D sound content production system.