An adaptive leaky normalized least-mean-square (NLMS) algorithm has been developed to optimize stability and performance of active noise cancellation systems. The research addresses LMS filter performance issues related to insufficient excitation, nonstationary noise fields, and time-varying signal-to-noise ratio. The adaptive leaky NLMS algorithm is based on a Lyapunov tuning approach in which three candidate algorithms, each of which is a function of the instantaneous measured reference input, measurement noise variance, and filter length, are shown to provide varying degrees of tradeoff between stability and noise reduction performance. Each algorithm is evaluated experimentally for reduction of low frequency noise in communication headsets, and stability and noise reduction performance are compared with that of traditional NLMS and fixed-leakage NLMS algorithms. Acoustic measurements are made in a specially designed acoustic test cell which is based on the original work of Ryan et al. ["Enclosure for low frequency assessment of active noise reducing circumaural headsets and hearing protection," Can. Acoust. 21, 19-20 (1993)] and which provides a highly controlled and uniform acoustic environment. The stability and performance of the active noise reduction system, including a prototype communication headset, are investigated for a variety of noise sources ranging from stationary tonal noise to highly nonstationary measured F-16 aircraft noise over a 20 dB dynamic range. Results demonstrate significant improvements in stability of Lyapunov-tuned LMS algorithms over traditional leaky or nonleaky normalized algorithms, while providing noise reduction performance equivalent to that of the NLMS algorithm for idealized noise fields.