This paper presents a new unknown response masking technique to minimize the effect on test loss due to over-masking. Unlike previous works where the scan responses are masked before entering the response compactor, the proposed method could mask the Xs when they are transformed on the scan path. Meanwhile, the masking cells are inserted along the scan paths, thus they would have no degradation on the performance of the designs. In addition, the test data required to mask unknown responses is only one bit for each test pattern. Experimental results show the effectiveness of the proposed method.