The effect of lossy, MP3 (MPEG-Layer 3) compression on clinically important Doppler parameters - derived from spectral analysis of Doppler ultrasound signals - was investigated. Ten, 10-second acquisitions of gated Doppler ultrasound signal were collected in a phantom perfused with a pulsatile flow waveform. Doppler data were collected using two sample volume lengths - 1.5 mm and 10 mm. The in- phase and quadrature Doppler signals were digitized at 44.1 kHz and compressed using four grades of signal compression (with corresponding compression ratios given in brackets): uncompressed, 128 kbits/s (11:1), 64 kbits/s (44:1). The digital audio signals were identically processed with a Fourier analysis program that provided an estimate of the instantaneous Doppler frequency (velocity) spectrum and derived parameters such as peak velocity, mean velocity, spectral width, total integrated power, and ratio of spectral power from negative and positive velocities. Analysis of variance indicated there were no significant differences (p>0.05) observed in the peak or mean velocities, spectral width, or the power ratio derived from 128 kbits/s and 64 kbits/s audio signals when compared to the uncompressed audio signals (both sample volume lengths) and the 128 kbits/s audio signals (10 mm sample volume length). However, for the 32 kbits/s audio signals, significant differences (p<0.001) were found in all of the studied parameters.