Aged humans show severe difficulties in temporal auditory processing tasks (e.g., speech recognition in noise, low-frequency sound localization, gap detection). A degradation of auditory function with age is also evident in experimental animals. To investigate age-related changes in temporal processing, we compared extracellular responses to temporally variable pulse trains and human speech in the inferior colliculus of young adult (3 month) and aged (3 years) Mongolian gerbils. We observed a significant decrease of selectivity to the pulse trains in neuronal responses from aged animals. This decrease in selectivity led, on the population level, to an increase in signal correlations and therefore a decrease in heterogeneity of temporal receptive fields and a decreased efficiency in encoding of speech signals. A decrease in selectivity to temporal modulations is consistent with a downregulation of the inhibitory transmitter system in aged animals. These alterations in temporal processing could underlie declines in the aging auditory system, which are unrelated to peripheral hearing loss. These declines cannot be compensated by traditional hearing aids (that rely on amplification of sound) but may rather require pharmacological treatment.