Present paper deals with the simulation and implementation of two functional units, parse to shaping frame and differential encoder, for spectral shaping in 56kbps digital modem transmitter. The idea behind spectral shaping is to adapt the shape of the transmitted signal to conform to the shape or spectral limitations of the channel without changing the basic pulse shape or peak to average ratio. This unit suppresses the signal component close to DC to minimize the effect of AC couplings or to provide sufficient data transitions for reliable clock recovery. A combined algorithm for implementation of the parse to shaping frame and differential encoder functions utilized in transmitter of 56kbps digital modem has been presented. Parse to shaping frame function has been implemented with the help of bit masking technique where as differential encoder has been implemented with the help of XOR functioning and delay line implementation. Assembly program corresponding to algorithm developed during present study has been simulated and loaded into the DSP module to implemented Parse to Shaping Frame and Differential Encoding process. Practical results obtained have been found to be almost same as obtained theoretically and by simulation.