Acoustic echo cancelers (AECs) are used in teleconferencing systems to reduce undesired echoes originating from coupling between the loudspeaker and the microphone. Better performance in terms of sound localization can be achieved only by using multichannel AECs. By the use of a two-channel (stereo) system, it is already possible to obtain more realistic performance than the monochannel case because listeners have more spatial information that helps to identify the speaker position. In this paper, a novel approach to stereo AEC is proposed based on a combination of psychoacoustic effects. The principle of the proposed structure is to use an approach based on the “missing-fundamental” phenomenon at low frequencies (below 500 Hz) and a modified phase modulation approach at higher frequencies. Several results are presented in terms of magnitude-squared coherence, Itakura-Saito measure, convergence speed of adaptive filters, interaural cross-correlation, and subjective evaluation, in order to confirm the validity of the proposed approach.