The Zwicker tone (ZT) is an auditory after-image, i.e. a tonal sensation that occurs following the presentation of notched noise. In the present study, the hypothesis that neural lateral inhibition is involved in the generation of this auditory illusion was investigated in humans through differences in perceptual detection thresholds measured following broadband noise, notched noise, and low-pass noise stimulation. The detection thresholds were measured using probe tones at several frequencies, within as well as outside the suppressed frequency range of the notched noise, and below as well as above the corner frequency of the low-pass noise. Thresholds measured after broadband noise using a sequence of four 130-ms probe tones (with a 130-ms inter-burst interval) proved to be significantly smaller that those measured using the same probe tones after notched noise at frequencies falling within the notch, but larger for frequencies on the outer edges of the noise. Thresholds measured following low-pass noise using the same sequence of probe tones were found to be smaller at frequencies slightly above the corner, but larger at lower, neighboring frequencies. This pattern of results is consistent with the hypothesis that the changes in auditory sensitivity induced by stimuli containing sharp spectral contrasts reflect lateral inhibition processes in the auditory system. The potential implications of these findings for the understanding of the mechanisms underlying the generation of auditory illusions like the ZT or tinnitus are discussed.