1. The audio signal is split into 32 frequency bands that match the frequency characteristics of the human ear
2. The sound content of each band is then analysed and coded using a specialised algorithm which uses the lowest possible amount of data for the given content by exploiting the psychoacoustic aspects
3. When an MP3-audio is to be played back, decoding requires the data blocks to be separated out so that the frequency data can be reconstructed and used to rebuild the original signal