Stimulus-dependent synaptic interactions underlying selective sensory representations in neural circuits specialized for sensory processing and sensorimotor integration remain poorly understood. The songbird telencephalic nucleus HVC is a sensorimotor area essential to learned vocal control with one projection neuron (PN) type (HVC(RA)) innervating a song premotor pathway, another PN (HVC(X)) innervating a basal ganglia pathway essential to vocal plasticity, and interneurons (HVC(Int)). Playback of the bird's own song (BOS), but not other songs, evokes action potential bursts from both PNs, but HVC(RA) and HVC(X) display distinct BOS-evoked subthreshold responses. To characterize synaptic interactions underlying HVC's BOS-selective responses and assess stimulus-evoked changes in functional interactions between HVC neurons, we made simultaneous in vivo intracellular recordings from various HVC neuron pairs in urethan-anesthetized zebra finches. Spike-triggered averaging revealed that all HVC neuron types receive common excitation and that the onset of this excitation occurs during a narrower time window in projection neurons during BOS playback. To distinguish local from extrinsic contributions to HVC subthreshold response patterns, we inactivated the HVC local circuit with GABA or occluded inhibition in single HVC(X) cells. After either treatment, BOS-evoked responses in HVC(X) neurons became purely depolarizing and subthreshold responses of HVC(X) and HVC(RA) cells became remarkably similar to one another while retaining BOS selectivity. Therefore both PN types receive a common extrinsic source of BOS-selective excitation, and local inhibition specifically alters processing of auditory information in HVC(X) cells. In HVC, excitatory and inhibitory synaptic interactions are recruited in a stimulus-dependent fashion, affecting auditory representations of the BOS locally and in other song nuclei important to song learning and production.