In the field of passenger car engines, recent research advances have proven the effectiveness of downsized, turbocharged and direct injection concepts, applied to gasoline combustion systems, to reduce the overall fuel consumption while respecting particularly stringent exhaust emissions limits. Knock and turbocharger control are two of the most critical factors that influence the achievement of maximum efficiency and satisfactory drivability, for this new generation of engines. The sound emitted from an engine encloses many information related to its operating condition. In particular, the turbocharger whistle and the knock clink are unmistakable sounds. This paper presents the development of real-time control functions, based on direct measurement of the engine acoustic emission, captured by an innovative and low cost acoustic sensor, implemented on a platform suitable for on-board application. The real-time signal processing algorithms can be integrated in the actual ECU software, in order to improve the engine controller performance. Experimental tests have been carried out in a test-cell environment, using a downsized and turbocharged GDI engine. In order to evaluate the acoustic signal processing algorithms performance, and to prove the effectiveness of the proposed methodology, knocking was externally induced by acting on the spark advance, while turbocharger operation was controlled over wide and fast speed transients.