Most sounds in the natural environment are amplitude-modulated (AM). To determine if AM alters the neuronal sensitivity to interaural time differences (ITDs) in low-frequency sounds, we tested neuronal responses to a binaural beat stimulus with and without modulation. We recorded from single units in the inferior colliculus of the unanesthetized rabbit. We primarily used low frequency ( approximately 25 Hz) modulation that was identical at both ears. We found that modulation could enhance, suppress, or not affect the discharge rate. In extreme cases, a neuron that showed no response to the unmodulated binaural beat did so when modulation was added to both ears. At the other extreme, a neuron that showed sensitivity to the unmodulated binaural beat ceased firing with modulation. Modulation could also affect the frequency range of ITD sensitivity, best ITD, and ITD tuning width. Despite these changes in individual neurons, averaging across all neurons, the peak and width of the population ITD function remained unchanged. Because ITD-sensitive neurons also time-locked to the modulation frequency, the location and sound attributes are processed simultaneously by these neurons.