The ability of horses to use binaural time and intensity difference cues to localize sound was assessed in free-field localization tests by using pure tones. The animals were required to discriminate the locus of a single tone pip ranging in frequency from 250 Hz to 25 kHz emitted by loudspeakers located 30 degrees to the left and right of the animals' midline (60 degrees total separation). Three animals were tested with a two-choice procedure; 2 additional animals were tested with a conditioned avoidance procedure. All 5 animals were able to localize 250 Hz, 500 Hz, and 1 kHz but were completely unable to localize 2 kHz and above. Because the frequency of ambiguity for the binaural phase cue delta phi for horses in this test was calculated to be 1.5 kHz, these results indicate that horses can use binaural time differences in the form of delta phi but are unable to use binaural intensity differences. This finding was supported by an unconditioned orientation test involving 4 additional horses, which showed that horses correctly orient to a 500-Hz tone pip but not to an 8-kHz tone pip. Analysis of the superior olivary complex, the brain stem nucleus at which binaural interactions first take place, reveals that the lateral superior olive (LSO) is relatively small in the horse and lacks the laminar arrangement of bipolar cells characteristic of the LSO of most mammals that can use binaural delta I.