Phenomena resembling tinnitus and Zwicker phantom tone are seen to result from an auditory gain adaptation mechanism that attempts to make full use of a fixed-capacity channel. In the case of tinnitus, the gain adaptation enhances internal noise of a frequency band otherwise silent due to damage. This generates a percept of a phantom sound as a consequence of hearing loss. In the case of Zwicker tone, a frequency band is temporarily silent during the presentation of a notched broadband sound, resulting in a percept of a tone at the notched frequency. The model suggests a link between tinnitus and the Zwicker tone percept, in that it predicts different results for normal and tinnitus subjects due to a loss of instantaneous nonlinear compression. Listening experiments on 44 subjects show that tinnitus subjects (11 of 44) are significantly more likely to hear the Zwicker tone. This psychoacoustic experiment establishes the first empirical link between the Zwicker tone percept and tinnitus. Together with the modeling results, this supports the hypothesis that the phantom percept is a consequence of a central adaptation mechanism confronted with a degraded sensory apparatus.