The neural response to amplitude-modulated sinus sounds (AM sound) was investigated in the auditory cortex and insula of the awake squirrel monkey. It was found that 78.1% of all acoustically driven neurons encoded the envelope of the AM sound; the remaining 21.9% displayed simple On, On/Off or Off responses at the beginning or the end of the stimulus sound. Those neurons with AM coding were able to encode the AM sound frequency in two different ways: (1) the spikes followed the amplitude modulation envelopes in a phase locked manner; (2) the spike rate changed significantly with changing modulation frequencies. As reported in other species, the modulation transfer functions for rate showed higher modulation frequencies than the phase-locked response. Both AM codings exhibited a filter characteristic for AM sound. Whereas 46.6% of all neurons had the same filter characteristic for both the spike discharge and the phase-locked response, the remaining neurons displayed combinations of different filter types. The discharge pattern of a neuron to simple tone or noise bursts suggests the behaviour of this neuron when AM sound is used as the stimulus. Neurons with strong onset responses to tone/noise bursts tended to have higher phase-locked AM responses than neurons with weak onset responses. The spike rate maxima for AM sound showed no relation to the tone/noise burst discharge patterns. Varying modulation depth was encoded by the neuron's ability to follow the envelope cycles and not by the non-phase-locked spike rate frequency. The organization of the squirrel monkey's auditory cortex has previously been established by an anatomical study. We have added two new fields using physiological parameters. All fields investigated showed a clear functional separation for time-critical information processing. The best temporal resolution was shown by the primary auditory field (AI), the first-temporal field (T1) and the parainsular auditory field (Pi). The neural data in these fields and the amplitude modulation frequency range of squirrel monkey calls suggest a similar correlation between vocalization and perception as in human psychophysical data for speech and hearing sensation. The anterior fields in particular failed to follow the AM envelopes. For the first time in a primate, the insula was tested with different sound parameters ranging from simple tone bursts to AM sound. It is suggested that this cortical region plays a role in time-critical aspects of acoustic information processing. The observed best frequencies covered the same spectrum as AI. As in the auditory fields, most neurons in the insula encoded AM sound with different filter types. The high proportion of neurons unable to encode AM sound (40.6%) and the low mean best modulation frequency (9.9 Hz) do not support a prominent role of the insula in temporal information processing.