Parametric-stereo coding is a technique to efficiently code a stereo audio signal as a monaural signal plus a small amount of parametric overhead to describe the stereo image. The stereo properties are analyzed, encoded, and reinstated in a decoder according to spatial psychoacoustical principles. The monaural signal can be encoded using any (conventional) audio coder. Experiments show that the parameterized description of spatial properties enables a highly efficient, high-quality stereo audio representation.