The whole nerve action potential (AP) from the auditory nerve and midbrain averaged evoked potential (AEP) were recorded in Hyla chrysoscelis and H. versicolor in response to synthesized amplitude-modulated stimuli with variable modulation frequencies (Fm). The AP from these frogs is similar to the potential described for mammals and showed a bandpass characteristic in its ability to follow sinusoidally amplitude-modulated (AM) sound stimuli. A lesioning study suggests that the midbrain AEP is a localized neural response of neurons near the ventral border of the torus semicircularis. The AEP is a complex waveform consisting of fast and slow components. The fast component encodes the temporal structure of acoustic stimuli and is used to measure temporal sensitivity in these two species. The AEP behaves like a low-pass filter with a cutoff frequency of 250 Hz when tracking AM signals. Threshold for detection requires a modulation depth of 8-12% of the total stimulus amplitude (delta I = 1.5-2.0 dB). Relative to the eighth nerve AP, the AEP displays an enhanced coding of AM signals when Fm less than 100 Hz, and a slightly inferior ability to code Fm above 250 Hz. The AEP reflects only that portion of the neural response that encodes amplitude fluctuations. In comparison to the range of amplitude fluctuations coded by single units in the rat inferior colliculus or by human evoked potential, the frog AEP codes higher rates of Fm. The proposal that these frogs process AM stimuli solely on the basis of amplitude fluctuations, and do not use spectral cues at higher modulation frequencies is considered. The AM sensitivity of the AEP, which encompasses most biologically relevant rates of amplitude fluctuation for the animal, and the limited frequency resolution of the periphery, lend support to this proposal. However, convergent spectral processing at higher auditory centers cannot be excluded by this study. Psychophysical tests will be required to determine whether both of these mechanisms may be operating during temporal information processing in anurans.