This paper describes the successful development of an active muffler system for the Detroit Diesel 6V-92TA industrial diesel engine used in a generator set application.The active muffler analyzes the structure of the exhaust sound and generates ‘anti-noise’ through loudspeakers. The ‘anti-noise’ is equal in magnitude and 180 degrees out of phase with the exhaust sound. The exhaust sound and ‘anti-noise’ cancel each other at the exhaust outlet. Adaptive filter techniques are used to update the ‘anti-noise’ signal in response to changes in engine operating conditions.This technique is effective at frequencies less than 500 Hz, where a significant portion of the exhaust sound is concentrated. Combined with a low flow restriction passive silencer to attenuate primarily high frequency sound, exhaust noise is reduced well below levels emitted by conventional passive mufflers.The final prototype active muffler system included a three driver loudspeaker active element and low flow restriction passive element. This design produced exhaust sound levels 6 dB to 13 dB quieter than levels emitted by the best conventional passive muffler tested. The combined active and passive element system substantially reduced exhaust restriction, improving average fuel economy almost 2%. The active muffler system also occupied 8 % less space, by volume, than the best conventional passive muffler.