ITU-T G.729.1 is a scalable coder recently standardized in ITU-T for wideband telephony and voice over IP (VoIP) applications. Composed of three stages, this codec provides a scalable bitstream between 8 and 32 kbit/s both in narrowband and wideband. This paper describes the first stage which is a narrowband embedded CELP coder at 8 and 12 kbit/s. The 8 kbit/s layer ensures interoperability with ITU-T G.729 standard with a reduced complexity, and with a quality better than G.729 Annex A. At 12 kbit/s, G.729.1 reaches the quality level of the 11.8 kbit/s G.729 Annex E in spite of the embedded structure. The modifications brought to the original G.729 scheme to achieve this performance are explained and formal test results provided.