The ability to lateralize dichotic clicks with either interaural time delays (ITD) or interaural level differences (ILD) was tested in seven multiple sclerosis (MS) subjects who had normal audiograms. Along with the psychoacoustical tests, magnetic resonance images (MRI) of the subjects' brainstem were obtained. After matching each MRI section with the corresponding section of a computerized atlas of the brainstem, the parts of the auditory pathway affected by each MS lesion were determined. Of the seven subjects two performed normally with both types of interaural asymmetry and had no brainstem lesions involving the auditory pathway. Two subjects performed normally only with level differences, but perceived all the dichotic clicks with different ITDs in the center of the head; both had lesions involving the trapezoid body. Three subjects could not perform normally with either task, perceiving the clicks to the sides and never in the center for both ITDs and ILDs; all three had unilateral lesions of the lateral lemniscus. A multi-level decision making model is proposed to account for these results.