Combining the channels of a multiple input/multiple output (MIMO) system into suitably chosen modes by a domain transformation offers great improvements of adaptive filtering algorithms. In this paper we present an algorithm for adaptive MIMO filtering, called source-domain adaptive filtering (SDAF), with application to multichannel acoustic echo cancellation operating in an optimally adjusted transform domain without requiring a-priori knowledge about the system. Experimental results show a significant performance improvement compared to fixed transformation bases.