A structural model is proposed for the processing of interaural intensity differences by the lateral superior olive. One fundamental assumption is that the incoming excitatory projections from the ipsilateral anteroventral cochlear nucleus innervate columns of LSO neurons serially according to threshold. A second fundamental assumption is that the inhibitory innervation from the ipsilateral medial nucleus of the trapezoid body is also serially arranged according to threshold but in the opposite direction along the LSO column. Using neurophysiological and neuroanatomical data for neuronal response curves, connectional patterns, and cell and synapse numbers, the model was formulated quantitatively and implemented for machine computation. Azimuthal location is encoded by the position along the LSO column where LSO cell firing first goes to zero. Accuracy of coding was tested for three different connectional schemes, for variations in neuronal parameters, and for cell and synapse death. Encoding is shown to be independent of absolute sound level and to vary linearly with interaural intensity difference.