On the wider sidebands of FM stations, HD Radio can carry multiple streams of FM and/or AM quality. National Public Radio in particular hopes to be able to carry several different streams through the transmitters of member stations, calling its proposed addition to the FM standard "Tomorrow Radio". Some have also proposed using the system to carry surround sound broadcasts with 5.1 channel audio, though this or other multichannel setups reportedly may prevent the fade-to-analog fallback on "hybrid" analog+digital broadcasts. Also, the FCC is still only authorizing multichannel use experimentally to individual stations who ask permission, however it seems to be becoming a de facto standard now that so many stations have adopted it.

Currently, FM stations in the United States are licensed to occupy approximately 200 kHz of RF spectrum, i.e., the FM band frequency allocations are 200 kHz apart. When a signal modulates the carrier, an infinite number of harmonically-related sidebands is created, i.e., the actual occupied bandwidth of the signal extends well past the highest modulating frequency (usually ±100 kHz), due to the non-linear nature of frequency modulation. In order to prevent harmful interference to other stations, the carrier frequencies of stations within markets are thus assigned on alternate channels, i.e., they are 400 kHz apart. In addition, the output of the FM transmitter is carefully filtered to limit the RF energy in the sidebands above 120kHz. In contrast, FM stations have a baseband bandwidth of about 100 kHz, only 15 kHz of which is used by the (analog monophonic) audio. Analog stereo uses up to 53 kHz of baseband space, and RBDS is centered at 57 kHz. The "remainder" is available for other services, including rental for paging and datacasting, or as a transmitter-studio link for in-house telemetry.

While the various baseband signals all contribute in a complex manner to the total occupied bandwidth (and power) of the FM signal, it is important to consider two factors: (1) the modulating signal will generate a principal RF component at the fundamental sideband, e.g., a 67 kHz subcarrier will generate RF components at ±67 kHz (and ±134 kHz, etc.) from the FM carrier; and (2) any filtering of the modulated signal causes a certain (acceptable) amount of distortion in the received signal, resulting in the formation of intermodulation components from the various modulating signals.

In regular hybrid mode, the HD Radio station has its full ±100 kHz of RF bandwidth, and adds its digital signals into part of the upper and lower adjacent RF channels beyond that, using 1% of the main FM power level. In extended hybrid mode, the bandwidth of the FM signal is reduced to make way for additional OFDM carriers carrying more data. Because of this, FM stations may have to drop pre-existing subcarrier services (usually at 92 kHz and 67 kHz) in order to carry extended HD Radio, though such services can be restored through the digital subchannels that are then made available (which requires replacement of receivers). The analog stereo subcarrier would in theory eventually be dropped to make more room for digital, and eventually stations could elect to drop the analog baseband (monophonic audio) completely and go all-digital. However, considering that there are already billions of analog-only receivers, this is not expected to happen for a very long time.

There is also another royalty-free system called FMeXtra, which uses subcarriers to transmit digital radio. This is completely compatible with standard HD Radio, but likewise is reduced in bandwidth and bitrate if used on a station using an extended-hybrid mode. Analog audio is also reduced in volume if a station uses extended-hybrid mode, due to the reduction in modulation. Both situations are worsened by using successivly higher-bitrate modes of HD Radio.

There are still some concerns that HD Radio on FM will increase interference between different stations, though it is thought unlikely to make a major difference as it still fits within the existing spectral mask. It has been confirmed however that trying to listen to a distant FM station on a channel adjacent to a local HD Radio station can be difficult if not impossible, because of the very poor signal-to-noise ratio that it creates. It does not generally cause interference to any analog station within its 1mV/m² signal strength contour, the lowest limit to which the FCC protects most stations.

As with AM, FM stations transmit using a separate exciter to modulate the very different signals. A combiner is often used, either before common amplification or after separate amplification, though stations are also now allowed to use a separate radio antenna slightly higher or lower on the radio tower.