The main purpose of the study was to measure thresholds for interaural time differences (ITDs) and interaural level differences (ILDs) for acoustically presented noise signals in adults with bilateral cochlear implants (CIs). A secondary purpose was to assess the correlation between the ILD and ITD thresholds and error scores in a horizontal-plane localization task, to test the hypothesis that localization by individuals with bilateral implants is mediated by the processing of ILD cues. Eleven adults, all postlingually deafened and all bilaterally fitted with MED-EL COMBI 40+ CIs, were tested in ITD and ILD discrimination tasks in which signals were presented acoustically through headphones that fit over their two devices. The stimulus was a 200-msec burst of Gaussian noise bandpass filtered from 100 to 4000 Hz. A two-interval forced-choice adaptive procedure was used in which the subject had to respond on each trial whether the lateral positions of the two sound images (with the interaural difference favoring the left and right sides in the two intervals) moved from left-to-right or right-to-left. In agreement with previously reported data, ITD thresholds for the subjects with bilateral implants were poor. The best threshold was approximately 400 microsec, and only five of 11 subjects tested achieved thresholds <1000 microsec. In contrast, ILD thresholds were relatively good; mean threshold was 3.8 dB with the initial compression circuit on the implant devices activated and 1.9 dB with the compression deactivated. The ILD and ITD thresholds were higher than previously reported thresholds obtained with direct electrical stimulation (generally, <1.0 dB and 100 to 200 microsec, respectively). When the data from two outlying subjects were omitted, ILD thresholds were highly correlated with total error score in a horizontal-plane localization task, computed for sources near midline (r = 0.87, p < 0.01). The higher ILD and ITD thresholds obtained in this study with acoustically presented signals (when compared with prior data with direct electrical stimulation) can be attributed-at least partially-to the signal processing carried out by the CI in the former case. The processing strategy effectively leaves only envelope information as a basis for ITD discrimination, which, for the acoustically presented noise stimuli, is mainly coded in the onset information. The operation of the compression circuit reduces the ILDs in the signal, leading to elevated ILD thresholds for the acoustically presented signals in this condition. The large magnitude of the ITD thresholds indicates that ITDs could not have contributed to the performance in the horizontal-plane localization task. Overall, the results suggest that for subjects using bilateral implants, localization of noise signals is mediated entirely by ILD cues, with little or no contribution from ITD information.