Interaural time differences (ITDs) are the primary cue animals, including humans, use to localize low-frequency sounds. In vertebrate auditory systems, dedicated ITD processing neural circuitry performs an exacting task, the discrimination of microsecond differences in stimulus arrival time at the two ears by coincidence-detecting neurons. These neurons modulate responses over their entire dynamic range to sounds differing in ITD by mere hundreds of microseconds. The well-understood function of this circuitry in birds has provided a fruitful system to investigate how inhibition contributes to neural computation at the synaptic, cellular, and systems level. Our recent studies in the chicken have made significant progress in bringing together many of these findings to provide a cohesive picture of inhibitory function.