The amplitude of the N1-P2 component of a response evoked by a 250 Hz test stimulus presented once each 5 sec was measured. Interposed at a rate of one per sec were either 1) a 4000 Hz tone, 2) a 4000 Hz and a 4250 Hz tone presented simultaneously which generated within the ear an audible 250 Hz difference tone, or 3) a 250 Hz tone. The results indicated that the N1-P2 component when preceded by the 4000 Hz plus 4250 Hz stimulus pair was larger than when preceded by a 250 Hz tone, but smaller than when preceded by a 4000 Hz tome. Apparently the processing of the difference tone is unlike that of a sinusoid of the same frequency or that of a high frequency sinusoid which participated in the generation of the difference tone. Parallel electrophysiological data from cochlear recordings are discussed.