The spectral subtraction method is a well-known noise reduction technique. Most implementations and variations of the basic technique advocate subtraction of the noise spectrum estimate over the entire speech spectrum. However, real world noise is mostly colored and does not affect the speech signal uniformly over the entire spectrum. In this paper, we propose a multi-band spectral subtraction approach which takes into account the fact that colored noise affects the speech spectrum differently at various frequencies. This method outperforms the standard power spectral subtraction method resulting in superior speech quality and largely reduced musical noise.