1. Interaural level differences (ILDs), created by the head and pinna, have long been known to be the dominant acoustic cue for azimuthal localization of high-frequency tones. However, psychophysical experiments have demonstrated that human subjects can also lateralize complex high-frequency sounds on the basis of interaural time differences (ITDs) of the signal envelope. The lateral superior olive (LSO) is one of two pairs of binaural nuclei where the primary extraction of binaural cues for sound source location occurs. "IE" cells in LSO are inhibited by stimuli to the contralateral and excited by stimuli to the ipsilateral ear, and their response rate is therefore dependent on ILD. Anatomic specializations in the afferent pathways to the LSO suggest that this circuit also has a function in the detection of timing cues. We hypothesized that, besides ILD sensitivity, the IE property also conveys a sensitivity to ITDs of amplitude-modulated (AM) tones and could provide the physiological substrate for the psychophysical effect mentioned above. 2. In extracellular recordings from binaural LSO cells in barbiturate-anesthetized cats, response rate was a periodic function of ITDs of AM stimuli, i.e., all cells displayed ITD sensitivity. Binaural responses were smaller than responses to stimulation of the ipsilateral ear alone and were minimal when the envelopes in both ears were in-phase or nearly so. There was good correspondence between responses to ITDs and to dynamic interaural phase differences (IPDs), created by a difference in the envelope frequency to the two ears. Qualitatively, the responses were consistent with the outcome of an IE operation on temporally structured inputs. 3. To compare the relative importance of ILD and ITD, responses to combinations of the two cues were obtained. Despite robust ITD sensitivity in all binaural LSO cells encountered, the changes in response rate that would occur in response to naturally occurring ITDs were small in comparison with the changes expected for naturally occurring ILDs. The main limitation on ITD sensitivity was a steep decline in average discharge rate as the modulation frequency exceeded several hundred Hertz. 4. ITD sensitivity was also present to broadband stimuli, again with minimal rates occurring near 0 ITD. The sensitivity depended in a predictable fashion on the passband of filtered noise and was absent to binaurally uncorrelated noise bands. In response to clicks, ILDs interacted with ITD in a complicated fashion involving amplitude and latency effects. 5. Three low-characteristic frequency (CF) LSO cells were encountered that were IE and showed ITD sensitivity to the fine structure of low-frequency stimuli.(ABSTRACT TRUNCATED AT 400 WORDS)