MP3 is an acronym for MPEG-1 or MPEG-2 audio layer 3. MP3 is the file extension for MPEGaudio layer 3. Layer 3 is one of three coding schemes (layer 1, layer 2 and layer 3) for the compression of audio signals. Layer 3 uses perceptual audio coding and psychoacoustic compression to remove all superfluous information (more specifically, the redundant and irrelevant parts of a sound signal. The stuff the human ear doesn't hear anyway).