A model for lateral inhibition is presented in the context of the auditory channel. The mechanical analyzing system of the inner ear cannot alone account for the frequency resolution of hearing. Some additional mechanism, possibly lateral inhibition located in the auditory neural network, is needed to achieve the frequency selectivity observed in electrophysiological and psychoacoustical experiments. In a computer simulation study, the shape of an ideal lateral inhibition function was obtained. Such a function is applicable to all sensory modalities. In hearing, this function permits the sharpest possible frequency resolution as it can completely remove the frequency desharpening effect of the mechanical properties of the basilar membrane. In vision, it can compensate for abberations caused by the imperfections of the optical system of the eye.