Neuronal gain adaptation has been proposed as the underlying mechanism leading to the perception of phantom sounds such as Zwicker tones and tinnitus. In this gain-adaptation theory, cochlear compression plays a significant role with weaker compression leading to stronger phantom percepts. The specific aim of this study was to find a link between the strength of neuronal gain adaptation and cochlear compression. Compression was assessed using distortion product otoacoustic emissions (DPOAEs). Gain adaptation is hypothesized to manifest itself in the sensitization observed for the detection of masked tones when preceded by notched noise. Perceptual thresholds for pure tones in notched noise were measured at multiple frequencies following various priming signals. The observed sensitization was larger than expected from the combined effect of the various maskers. However, there was no link between sensitization and compression. Instead, across subjects, stronger sensitization correlated with stronger DPOAEs evoked by low-level primaries. In addition, growth of DPOAEs correlated reliably with perceptual thresholds across frequencies within subjects. Together, the data suggest that short-term dynamic adaptation leading to perceptual sensitization is the result of an active process mediated by the outer hair cells, which are thought to modulate the gain of the cochlear amplifier via efferent feedback.