In this paper, a sparse FIR filter design method based on cascaded compensation structure is proposed. The proposed method is a two-stage filter design approach with novel attenuation and transition controls of the subfllters. The model filter is elaborately designed with decreasing stopband attenuation to improve the sparsity of the filter. A compensating filter with careful transition band and stopband design is cascaded with the model filter to compensate the decreasing stopband attenuation of the model filter so as to synthesize the desired uniform attenuation. Simulation results show that the proposed cascaded compensation design of sparse FIR filters leads to a significant improvement of sparsity than the exiting conventional direct form or transposed direct form filter designs.