Abstract: In this paper, a new encoding algorithm of spectral envelope based on NLMS in G.729.1 for VoIP is proposed. In the TDAC part of G.729.1, the spectral envelope and MDCT coefficients extracted in the weighted CELP coding error (lower-band) and the higher-band input signal are encoded. In order to reduce allocation bits for spectral envelope coding, a new quantization algorithm based on NLMS is proposed. Also, reduced bits are used to enhance sound quality. The performance of the proposed algorithm is evaluated by sound quality and bit reduction rates in clean and frame loss conditions.