A programmable digital hearing aid circuit and method for operating and programming same are disclosed. The device provides a flexible means to compensate for undesirable frequency response distortion normally due to the electro-acoustical characteristics of the microphone, receiver, and sound coupling mechanisms employed in hearing aid design. Parameters of the programmable hearing aid circuit may also be set to tailor the hearing aid response characteristics for the frequency-dependent hearing loss of an individual hearing aid user. The device is intended to make available a significant improvement in audio fidelity to users of hearing aid devices.