In this thesis, we propose the Spatial Audio Object Coding (SAOC) which is a new audio coding scheme. It deals with a number of audio objects to provide a user with active audio services which can be controlled by the user``s preference. When many audio objects are transmitted, the conventional audio coders such as the Advanced Audio Coding(AAC) and the MPEG Surround should compress each object separately, and the bitrate greatly increases in proportional to the number of input objects. In contrast, the SAOC represents all objects as a stereo downmixed signal with some side information, and the bitrate can be significantly reduced compared to that of the conventional audio coders. In spite of the advantage of bitrate reduction, the SAOC has the severe problem such as the degradation of sound quality. To solve the problem, the variable subband analysis and the revised SAOC structure called two-step structure are also proposed in this thesis. Through a subjective listening test, it was confirmed that the proposed method improves sound quality by a small bitrate increase.