A sound reproduction system has been developed, for converting signals on two input channels into surround signals on five or seven output channels and vice-versa. A decoder is included in the sound reproduction system which enhances the correlated component of the input signals in the desired direction and reduces the strength of such signals in channels not associated with the encoded direction, while preserving the apparent loudness of all output channels, the separation between the respective left and right output channels and the total energy of the uncorrelated component of the input channels in each output channel. The decoder may include a uniquely defined matrix that helps to ensure that the surface of the output signals is smooth and continuous.