The developed method presents a new concept for replacing the conventionally used stethoscope with a smart stethoscope. The real time acquisitions of heart and lung sound are initially discussed in the first phase. The second phase extends towards filtering and signal analyzing algorithm implementation. The last phase differentiates the heart rate and lung sound from the resulting waveform. The processed signals measure heart rate and display the real time lung sound signal that can be visually compared with the sound samples of respiratory diseases for its diagnosis. This user-friendly, cost efficient device is thus developed to assist the doctors for arriving in accurate results and conclusions. Since less medical attendant is required, the device could be a home care appliance that can help all age groups in detection of heart and lung diseases. A Low Cost, Home Care Smart Stethoscope For Diagnosis of Respiratory Diseases and Heart Rate Measurement. © IAEME Publication.