The auditory nerve contains thousands of fibers from single nerve cells (neurons), carrying information from the ear to the brain. A sound stimulus that is a single tone has the properties of frequency (pitch) and intensity (loudness). The normal environment is full of far more complex sounds, and in many cases the intensities of various parts of a complex sound change rapidly with time. Such fluctuations in sound intensity produce dynamic or transient responses in auditory neurons which carry important information in complex sound stimuli such as speech. This proposal explores how the auditory system may have specialized mechanisms to process dynamic responses and may extend the dynamic operating range compared to the steady-state range of hearing. A novel technique of sinusoidal amplitude modulation is used along with electrophysiological recording of single neurons and with the newly-discovered modulation-following response, which is a compound response. Results will be important for models of how the sound information is transmitted from receptor cells in the inner ear to the nerve cells of the auditory nerve and so to the brain. The results will have an impact beyond auditory neuroscience to sensory neuroscience in general because of the importance of coding mechanisms, and may become applicable not only to hearing disabilities, but to communications technology and artificial speech recognition devices.