Poor sensitivity to the interaural time difference (ITD) constrains the ability of human bilateral cochlear implant users to listen in everyday noisy acoustic environments. ITD sensitivity to periodic pulse trains degrades sharply with increasing pulse rate but can be restored at high pulse rates by jittering the interpulse intervals in a binaurally coherent manner (Laback and Majdak. Binaural jitter improves interaural time-difference sensitivity of cochlear implantees at high pulse rates. Proc Natl Acad Sci USA 105: 814-817, 2008). We investigated the neural basis of the jitter effect by recording from single inferior colliculus (IC) neurons in bilaterally implanted, anesthetized cats. Neural responses to trains of biphasic pulses were measured as a function of pulse rate, jitter, and ITD. An effect of jitter on neural responses was most prominent for pulse rates above 300 pulses/s. High-rate periodic trains evoked only an onset response in most IC neurons, but introducing jitter increased ongoing firing rates in about half of these neurons. Neurons that had sustained responses to jittered high-rate pulse trains showed ITD tuning comparable with that produced by low-rate periodic pulse trains. Thus, jitter appears to improve neural ITD sensitivity by restoring sustained firing in many IC neurons. The effect of jitter on IC responses is qualitatively consistent with human psychophysics. Action potentials tended to occur reproducibly at sparse, preferred times across repeated presentations of high-rate jittered pulse trains. Spike triggered averaging of responses to jittered pulse trains revealed that firing was triggered by very short interpulse intervals. This suggests it may be possible to restore ITD sensitivity to periodic carriers by simply inserting short interpulse intervals at select times.