An audio codec is a computer program that compresses/decompresses digital audio data according to a given audio file format or streaming audio format. Most codecs are implemented as libraries which interface to one or more multimedia players, such as XMMS, Winamp or Windows Media Player.

In some contexts, the term "audio codec" can refer to a hardware implementation or sound card. When used in this manner, the phrase audio codec refers to the device encoding an analog audio signal to a digital audio signal, or decoding an analog audio signal from a digital audio signal. Thus, in such a context, the term is actually referring to a combined audio AD/DA converter. One example is Intel Corporation's AC'97 standard, which is comprised of a digital controller paired with an analog unit.