Compared to other sensory systems, extensive subcortical neural processing takes place in the auditory system, and various perceptual abilities can apparently be accounted for by the subcortical encoding of particular sound features. Consequently, the role of the auditory cortex is still poorly understood. In order to address this question, we have used a combination of neurometric and psychometric approaches to investigate how the firing of neurons in auditory cortex relates to the way in which sounds are heard. In addition, we have examined the behavioural consequences of manipulating neural activity in the cortex using both pharmacological approaches and a chromophore-targeted neuronal degeneration technique. This talk will consider how spatial and non-spatial aspects of sound are represented in the auditory cortex and then focus on its role in sound localization. In particular, our studies of training-induced plasticity highlight the importance of interactions between cortical and subcortical processing in forming new associations between the physical cues that underlie sound localization and directions in space.