A new design of Psycho-Acoustic Model in MPEG-214 AAC encoding is proposed. Differing from the conventional PC-based and DSP-based encoders, it was based on hybrid architectures. It was optimized at algorithmic and at architectural levels. At algorithmic level, MDCT-based PAM and fixed-coefficients were used to replace the original FFPbased PAM and spreading functions. At architectural level, the co-processor PAM design is proposed. The proposed design could be used in a real-time MPEG-214 AAC LC stereo encoder while maintaining CD quality below 30 MHz.