The invention relates to an electronic percussion-type musical instrument, such as an electronic piano, capable of producing electronically sounds simulating a piano, harpsichord or other keyboard percussion instrument. The keyboard is multiplexed to produce a serial time division multiplexed data stream having tri-level encoded signals in time slots corresponding to the keys, wherein the encoded signals indicate whether the key is undepressed, partially depressed or fully depressed. The amount of time for the key to travel in its undepressed to its fully depressed state is detected and a binary representation of the key velocity correlated to this timing is stored in a memory for readout synchronized with the scanning of the keyboard. In each time slot, a portion of the percussion envelope for the pertaining key is calculated and generated together with the discrete amplitude levels for the percussion envelope in a digital to analog conversion circuit. The conversion circuit comprises a digital to analog converter connected to the velocity data and having its analog output connected to the multiplying input of a multiplying digital to analog converter having its other input connected to the output of the envelope generator. The envelope keys tones from a generator in the keyer circuit to produce tones having frequencies corresponding to the depressed keys of the keyboard and velocity scaled envelopes calculated by the velocity and envelope generation circuitry. All of the processing is accomplished on a time-shared basis among the keys of the keyboard and then converted to parallel format for the keying operation.