Sounds provide us with useful information about our environment which complements that provided by other senses, but also poses specific processing problems. How does the auditory system distentangle sounds from different sound sources? And what is it that allows intermittent sound events from the same source to be associated with each other? Here we review findings from a wide range of studies using the auditory streaming paradigm in order to formulate a unified account of the processes underlying auditory perceptual organization. We present new computational modelling results which replicate responses in primary auditory cortex [Fishman, Y.I., Arezzo, J.C., Steinschneider, M., 2004. Auditory stream segregation in monkey auditory cortex: effects of frequency separation, presentation rate, and tone duration. J. Acoust. Soc. Am. 116, 1656-1670; Fishman, Y. I., Reser, D. H., Arezzo, J.C., Steinschneider, M., 2001. Neural correlates of auditory stream segregation in primary auditory cortex of the awake monkey. Hear. Res. 151, 167-187] to tone sequences. We also present the results of a perceptual experiment which confirm the bi-stable nature of auditory streaming, and the proposal that the gradual build-up of streaming may be an artefact of averaging across many subjects [Pressnitzer, D., Hupé, J. M., 2006. Temporal dynamics of auditory and visual bi-stability reveal common principles of perceptual organization. Curr. Biol. 16(13), 1351-1357.]. Finally we argue that in order to account for all of the experimental findings, computational models of auditory stream segregation require four basic processing elements; segregation, predictive modelling, competition and adaptation, and that it is the formation of effective predictive models which allows the system to keep track of different sound sources in a complex auditory environment.