This study presents several optimization approaches for the MPEG-2/4 Audio Advanced Coding (AAC) Low Complexity (LC) encoding and decoding processes. Considering the power consumption and the peripherals required for consumer electronics, this study adopts the TI OMAP5912 platform for portable devices. An important optimization issue for implementing AAC codec on embedded and mobile devices is to reduce computational complexity and memory consumption. Due to power saving issues, most embedded and mobile systems can only provide very limited computational power and memory resources for the coding process. As a result, modifying and simplifying only one or two blocks is insufficient for optimizing the AAC encoder and enabling it to work well on embedded systems. It is therefore necessary to enhance the computational efficiency of other important modules in the encoding algorithm. This study focuses on optimizing the Temporal Noise Shaping (TNS), Mid/Side (M/S) Stereo, Modified Discrete Cosine Transform (MDCT) and Inverse Quantization (IQ) modules in the encoder and decoder. Furthermore, we also propose an efficient memory reduction approach that provides a satisfactory balance between the reduction of memory usage and the expansion of the encoded files. In the proposed design, both the AAC encoder and decoder are built with fixed-point arithmetic operations and implemented on a DSP processor combined with an ARM-core for peripheral controlling. Experimental results demonstrate that the proposed AAC codec is computationally effective, has low memory consumption, and is suitable for low-cost embedded and mobile applications.