A new method of improving delta modulation with syllabic companding is presented. Companded delta modulation has a sort of syllabic companding function in its local decoder without depending on any nonlinear elements such as a variolosser. Analyses are made of the stationary companding law, dynamic response, overload characteristics, signal-to-noise ratio, overall transmission characteristics, etc. These results have been experimentally verified. The signal-to-noise ratio of the proposed companded delta modulation method is almost equivalent to that of a conventional seven-bit compandored PCM. According to the present analysis, even better performance can be obtained with the same clock frequency used for PCM: 56 kilobits per second.