The intermediate valence compound YbAl3 exhibits a broad magnetic excitation in the inelastic neutron scattering spectrum with characteristic energy E1 approximately 50 meV, equal to the Kondo energy (T(K) approximately 600-700 K). In the low temperature (T < T(coh) approximately 40 K) Fermi liquid state, however, a new peak in the scattering occurs at E2 approximately 33 meV, which lies in the hybridization gap that exists in this compound. We report inelastic neutron scattering results for a single-crystal sample. The scattering at energies near E1 qualitatively has the momentum (Q) dependence expected for interband scattering across the indirect gap. The scattering near E2 has a very different Q dependence: it is a weak function of Q over a large fraction of the Brillouin zone and is smallest near (1/2,1/2, 1/2). A possibility is that the peak at E2 arises from a spatially localized excitation in the hybridization gap.