Simultaneous masking procedures were used to measure the hearing and underwater sound localization abilities of West Indian manatees. Auditory detection thresholds of pulsed, no-pulsed pure tones, and complex sounds were measured against white noise using forced-choice paradigms. Auditory thresholds as a function of intensity, center frequency, bandwidth, pulse rate, and spectral characteristics were measured. Resulting critical ratios for pure tone measurements demonstrated manatees have acute frequency filtering abilities compared with humans and other marine mammals. Signal repetition rate along with amplitude and frequency modulation providing temporal contrasts against aperiodic background noise and lowered detection thresholds. FM signal detection thresholds were measured at or below ambient background levels. Results with species specific calls and boat noise suggested loudness summation across distant critical bands, as well as FM and amplitude modulation reduced the masking effects observed with pure tones. Manatees are well adapted for hearing and locating high frequency sounds in noisy shallow water habitats where physical boundary and near surface phenomena impede the propagation of low frequencies. Narrow critical bands and selective perception of pulsed signals may be adaptations for detecting and locating species-specific vocalizations. High frequency harmonics in manatee calls provide essential directional cues between mothers and calves.