For the inefficiency and imbalance between robustness and imperceptibility of most of the current audio watermarking algorithms when applied to MP3 audio, a watermarking algorithm in compressed domain based on low frequency energy of channels of MP3 frames was proposed. The watermarking can be embedded and extracted during MP3 compression and decompression processes, which greatly enhances the efficiency. Considering the good stability of low frequency energy, the low frequency energy of channels was calculated by using Modified Discrete Cosine Transform (MDCT) coefficients produced in MP3 encoding and decoding processes, then the ratio between the energy of left and right channels was quantized with fixed step, and the watermarking was embedded by modifying some MDCT coefficients according to quantified results. Meanwhile, with the proportion of energy in different scalefactor bands, the embedding bands were selected before calculating low frequency energy of channels, which ensured a good balance between robustness and imperceptibility. The experimental results show that the proposed algorithm has a good robustness against various types of attacks while maintaining the original audio quality, especially against MP3 recompression attacks.