Modified discrete cosine transform (MDCT) is a computationally intensive fundamental processing block for mapping time into frequency in various versions of MPEG audio coding. An efficient algorithm for MDCT computation is a basic requirement to realize low-cost audio codec. This paper introduces a new recursive algorithm and architecture for MDCT. The proposed architecture requires minimum hardware and execution time. Folding of the input sequence is performed multiple times in the subsequent groups which results in a significant reduction in real multiplication and real addition operations. Also, fewer number of execution cycles are required to generate the output through this algorithm. The proposed structure is suitable for parallel VLSI implementation as it is simple, regular and modular.