A system for two‐wire, full‐duplex data transmission is proposed. It consists of two adaptive transversal filters, one accepting the transmitted symbols and working as an echo canceller, the other accepting the received symbols and functioning as a decision feedback equalizer. A joint stochastic adjustment algorithm (updates at each baud) is analyzed, and it is shown that the sum of the mean‐squared errors in the coefficients of both filters can be decoupled from its difference by selecting identical gain constants in each loop. The optimum gain equals the reciprocal of the sum of the taps of both loops. Convergence is exponential, and its time is 0.23 adjustments/db/tap. This is completely independent of all channel parameters. Implementation of the proposed structure requires neither multipliers nor A/D converters. Promising applications are seen in channels with moderate precursor distortion, such as highpass channels (dc‐restoration), two‐wire pbx systems with a need for high‐speed, full‐duplex communication, limited distance cable channels, and, most important, two‐wire digital subscriber lines for digital voice/data terminals. © 1979 The Bell System Technical Journal