In a Markov model speech recognition system, an acoustic processor generates one label after another selected from an alphabet of labels. Each vocabulary word is represented as a baseform constructed of a sequence of Markov models. Each Markov model is stored in a computer memory as (a) a plurality of states; (b) a plurality of arcs, each extending from a state to a state with a respective stored probability; and (c) stored label output probabilities, each indicating the likelihood of a given label being produced at a certain arc. Word likelihood based on acoustic characteristics is determined by matching a string of labels generated by the acoustic processor against the probabilities stored for each word baseform.; The present invention involves the specifying of label parameters and the constructing of word baseforms interdependently in a Markov model speech recognition system to improve system performance.