The present technology relates to a signal processing apparatus and method which are able to suppress a reduction in reception sensitivity.A reception signal is compressed so as to have a predetermined signal level or lower, and transmission data transmitted from a transmitter side and included in the reception signal compressed so as to have the signal level or lower is decoded. For example, an approximate replica signal reproducing large amplitude changes of the reception signal is generated, and the approximate replica signal is subtracted from the reception signal to compress the reception signal so as to have the signal level or lower. The present disclosure is applicable to, for example, a signal processing apparatus, a reception apparatus, a transmission/reception apparatus, a communication apparatus, an information processing apparatus, an electronic device, a computer, a program, a storage medium, a system, and so on.