Psychoacoustic bass (low frequency) enhancement approach has received strong interests from consumer electronics manufacturers who demand good bass quality from small or flat panel speakers. Due to physical limitations and cost constraints, good bass performance is lacking from such speakers. A typical solution is based on the psychoacoustic phenomenon known as the “missing fundamental”, whereby human auditory system can perceive the fundamental frequency from its higher harmonics. This psychoacoustic bass enhancement system generally uses nonlinear devices (NLD) or phase vocoders (PV) to generate harmonics that enhance bass virtually. However, both approaches have their strengths and weaknesses. This paper presents a hybrid system, which combines these two approaches, to overcome their drawbacks and achieve good bass performance. The new approach first separates musical signals into transient and steady-state components, and applies NLD and PV on the separated signals. MUSHRA subjective test is used to evaluate the bass effect and audio quality of the proposed hybrid system against the NLD and PV methods.