Sensing the interaural time difference (ITD) of a sound is crucial in localizing the sound source particularly for low-frequency sounds. However, the range of ITD that animals experience is quite small and inhibitory synapses are proposed to be significant in enhancing the ITD sensitivity. In birds, neurons in nucleus laminaris (NL) detect the coincidence of bilateral excitatory inputs from the cochlea nucleus and change their firing rate as a function of the ITD. Sound-intensity-dependent inhibition from superior olivary nucleus (SON) is known to have sustained effects in NL neurons and control the gain of coincidence detection, which makes the ITD sensitivity of NL neurons tolerant to strong-intensity sound. Here, we found a time-dependent phasic inhibition in chicken brain slices that follows the excitatory inputs from ipsilateral cochlea nucleus, sharpens coincidence detection and may enhance ITD sensitivity in low-frequency NL neurons. Coronal brainstem slices were obtained from post-hatch chickens and whole-cell recordings were made from NL neurons. The electrical stimulation to the ipsilateral projection fibers generated a polysynaptic IPSC that followed EPSC with 1~2 ms latency in the low-frequency NL neurons. These IPSCs were elicited even when SON was dissected out. GABA-positive small neurons are distributed in and near the NL and generated IPSCs in NL neurons when photoactivated by a caged glutamate compound. These results suggest that these GABAergic neurons are interneurons that mediate phasic inhibition to the NL neurons. Consistently, these IPSCs have fast decay kinetics that is attributable to the α1 subunit of GABAA receptor, the expression of which dominates in the low-frequency region of the NL. Model simulations demonstrate that phasic IPSCs narrow the time window of coincidence detection and increase the contrast of ITD-tuning during the low-level excitatory input. These effects of phasic inhibition are prominent in the ITD-tuning of low-frequency sound. Furthermore, cooperation of the phasic and sustained inhibitions effectively increases the contrast of ITD-tuning over a wide range of excitatory input levels. We propose that the complementary interaction between phasic and sustained inhibitions is the neural mechanism that regulates ITD sensitivity for low-frequency sound in the NL.