A portable musical instrument direct recording and playback device (10) for recording, editing, and replaying musical sounds generated by a musical instrument. The musical sounds are converted from analog to digital format, compressed for minimum storage usage, and stored in a digital storage medium. The stored signals are filed according to an indexing scheme that allows selection and retrieval of selected portions of the musical sounds. The selected portions are retrieved from storage, decompressed, converted back to analog signals, and output to a sound generating device. The operation of the device (10) is controlled by application software (19) and operating system software (21).