A newly developed PARCOR coefficients quantisation scheme is presented which is referred to as trellis in-loop PARCOR coefficients quantisation. In the in-loop quantisation scheme, each PARCOR coefficient is determined and quantised inside the analysis computation loop prior to the high order one. Therefore, the quantisation error is taken into account at each stage of lattice filter analysis. This scheme, when combined with trellis structure and associated with appropriate search algorithms, can achieve lower distortions than the conventional scalar quantisation. Simulation results show that by incorporating trellis structure into the in-loop quantisation scheme and using (M, L)-search algorithm withM= 4 andL= 8, an average gain of six bits per frame over the traditional methods can be achieved.