1. The ability of cells in the cochlear nucleus (CN) to encode frequency information in the presence of background noise on the basis of "place/rate" information was investigated by measuring the threshold, magnitude, and extent of lateral suppression in the ventral and dorsal CN of the anesthesized cat. The suppression regions were delineated through the use of "masked" response areas (MRAs). The MRA is a family of isointensity curves derived from the average discharge rate in response to a tone of variable frequency and sound pressure level in the presence of a concurrently presented broadband, quasi-flat-spectrum noise. Tonal stimuli of sufficient intensity are often effective in significantly reducing the average discharge rate of CN neurons over a wide frequency range. 2. Most units in the CN exhibit prominent lateral suppressive sidebands, but the variability in threshold, magnitude, and extent of suppression is large. Primary-like and onset units of the ventral CN manifest the least suppression and have the highest suppression thresholds. Pauser/buildup units in the dorsal division and choppers distributed throughout the CN show the largest amount of suppression and have the lowest suppression thresholds. 3. Auditory nerve fibers manifest some degree of lateral suppression, particularly fibers of low and medium spontaneous rate. However, in few instances are the threshold, magnitude, and extent comparable with that observed among the majority of chopper and pauser/buildup units. For this reason the lateral suppression observed among the latter unit types is unlikely to originate entirely from cochlear processes, but rather is likely to reflect largely neural mechanisms intrinsic to the CN. In contrast, the MRAs of most primary-like and onset units suggest that the suppression behavior of most of these cells originates mostly, if not entirely, in the cochlea and auditory nerve. 4. A primary consequence of lateral suppression is to preserve the sharp frequency selectivity of CN neurons at moderate to high sound pressure levels, particularly in background noise. In this fashion lateral suppressive mechanisms potentially enhance the representation of spectral information on the basis of place/rate information relative to that in the auditory nerve under noisy background conditions. 5. Lateral suppressive mechanisms probably underlie the dynamic range shift seen in the presence of a simultaneously presented noise. This mechanism may be crucial for preserving the ability to perceive signals in a noisy background.