In this paper a new algorithm named modified delta modulation (MDM) for encoding filter coefficients is proposed. And this paper presents the designing method of multiplier less FIR filters rosin영 Proposed MDM a19orithm. In the delta modulation (DM) system the quantiaation levels consist of two levels $pm$1, but in newly proposed MDM algorithm quantization levels are extended to many levels 0, $pm$2$^n$, n=0, 1, 2... It is recognized by the result of computer simulations that frequency response of multi-plierless FIR filters designed by MDM algorithm is relatively good. And comparing with con-ventional FIR filters on the number of hardware devices, this filter needs a little increased memory, but regardless of filter order it needs only one multiplier which is used for signal scaling.