A model of early auditory processing is proposed in which each peripheral channel is processed by a delay-and-subtract cancellation filter, tuned independently for each channel with a criterion of minimum power. For a channel dominated by a pure tone or a resolved partial of a complex tone, the optimal delay is its period. For a channel responding to harmonically related partials, the optimal delay is their common fundamental period. Each peripheral channel is thus split into two subchannels-one that is cancellation-filtered and the other that is not. Perception can involve either or both, depending on the task. The model is illustrated by applying it to the masking asymmetry between pure tones and narrowband noise: a noise target masked by a tone is more easily detectable than a tone target masked by noise. The model is one of a wider class of models, monaural or binaural, that cancel irrelevant stimulus dimensions to attain invariance to competing sources. Similar to occlusion in the visual domain, cancellation yields sensory evidence that is incomplete, thus requiring Bayesian inference of an internal model of the world along the lines of Helmholtz's doctrine of unconscious inference.