A natural sound can be described by dynamic changes in envelope (amplitude) and carrier (frequency), corresponding to amplitude modulation (AM) and frequency modulation (FM), respectively. Although the neural responses to both AM and FM sounds are extensively studied in both animals and humans, it is uncertain how they are corepresented when changed simultaneously but independently, as is typical for ecologically natural signals. This study elucidates the neural coding of such sounds in human auditory cortex using magnetoencephalography (MEG). Using stimuli with both sinusoidal modulated envelope (f(AM), 37 Hz) and carrier frequency (f(FM), 0.3-8 Hz), it is demonstrated that AM and FM stimulus dynamics are corepresented in the neural code of human auditory cortex. The stimulus AM dynamics are represented neurally with AM encoding, by the auditory steady-state response (aSSR) at f(AM). For sounds with slowly changing carrier frequency (f(FM) <5 Hz), it is shown that the stimulus FM dynamics are tracked by the phase of the aSSR, demonstrating neural phase modulation (PM) encoding of the stimulus carrier frequency. For sounds with faster carrier frequency change (f(FM) > or = 5 Hz), it is shown that modulation encoding of stimulus FM dynamics persists, but the neural encoding is no longer purely PM. This result is consistent with the recruitment of additional neural AM encoding over and above the original neural PM encoding, indicating that both the amplitude and phase of the aSSR at f(AM) track the stimulus FM dynamics. A neural model is suggested to account for these observations.