A set of headphones have microphones generating left and right feed-forward and feedback signals. A processor filters the feed-forward signals to provide ambient naturalness to the signals and generate binaural ambient signals, filters the feedback signals to generate noise-cancelling signals, and combines the noise-cancelling signals and the binaural ambient signals to generate output signals for an output transducer. A transmitter transmits the binaural ambient signals. Another set of headphones have microphones generating left and right feed-forward and feedback signals and a receiver configured to receive binaural signals. A processor filters the feed-forward signals according to a predetermined headphone frequency response providing ambient naturalness to the signals and generate local binaural ambient signals, filters the feedback signals to generate noise-cancelling signals, and combines the binaural signals, the noise-cancelling signals, and the local binaural ambient signals to generate output signals.
