A FPGA-based system suitable for augmented reality audio applications is presented. The sample application described here is adaptive noise cancellation (ANC). The system consists of a Spartan -3 FPGA XC3S400 board connected to a Philips Stereo-AudioCodec UCB 1400. The algorithms for the FIR filtering and for the adaption of the filter coefficients according to the Widrow-Hoff LMS algorithm are implemented on the FPGA board. Measurement results obtained with a dummy head measuring system are reported, and a detailed analysis of system performance and possible system improvements is given.