This paper proposes a new leaky least mean square (leaky LMS, LLMS) algorithm in which a norm penalty is introduced to force the solution to be sparse in the application of system identification. The leaky LMS algorithm is derived because the performance ofthe standard LMS algorithm deteriorates when the input is highly correlated. However, both ofthem do not take the sparsity information into account to yield better behaviors. As a modification ofthe LLMS algorithm, the proposed algorithm, named Lp-LLMS, incorporates a p norm penalty into the cost function ofthe LLMS to obtain a shrinkage in the weight update equation, which then enhances the performance of the filter in system identification settings, especially when the impulse response is sparse. The simulation results verify that the proposed algorithm improves the performance ofthe filter in sparse system settings in the presence ofnoisy input signals.