WE investigated whether the enhanced negativity of the human event-related brain potential elicited by changes in auditory lateralization is due to a higher-order change-detection process or whether it can be explained exclusively in terms of selective sensory adaptation. Infrequent changes in lateralization of a repetitive standard tone, generated by changes in interaural time differences, elicited a frontocentrally distributed negative brain wave in the 100-250 ms range relative to stimulus onset. This brain wave was also elicited when possible sensory adaptation was prevented by controlling for the state of refractoriness of location-specific neurones. The results demonstrate that changes in lateralization elicit a genuine mismatch negativity (MMN), indicating the activity of an automatic higher-order change-detection process.