Here, the perception of auditory spatial information as indexed by behavioral measures is linked to brain dynamics as reflected by the N1m response recorded with whole-head magnetoencephalography (MEG). Broadband noise stimuli with realistic spatial cues corresponding to eight direction angles in the horizontal plane were constructed via custom-made, individualized binaural recordings (BAR) and generic head-related transfer functions (HRTF). For comparison purposes, stimuli with impoverished acoustical cues were created via interaural time and level differences (ITDs and ILDs) and their combinations. MEG recordings in ten subjects revealed that the amplitude and the latency of the N1m exhibits directional tuning to sound location, with the amplitude of the right-hemispheric N1m being particularly sensitive to the amount of spatial cues in the stimuli. The BAR, HRTF, and combined ITD + ILD stimuli resulted both in a larger dynamic range and in a more systematic distribution of the N1m amplitude across stimulus angle than did the ITD or ILD stimuli alone. Further, the right-hemispheric source loci of the N1m responses for the BAR and HRTF stimuli were anterior to those for the ITD and ILD stimuli. In behavioral tests, we measured the ability of the subjects to localize BAR and HRTF stimuli in terms of azimuthal error and front-back confusions. We found that behavioral performance correlated positively with the amplitude of the N1m. Thus, the activity taking place already in the auditory cortex predicts behavioral sound detection of spatial stimuli, and the amount of spatial cues embedded in the signal are reflected in the activity of this brain area.