Auditory neuropathy affects synaptic encoding or neural conduction of signals in the cochlea or the auditory nerve. Subjects with auditory neuropathy poorly recognize speech in noise which correlates with poor temporal processing. The integrity of temporal processes in the auditory system can be assessed with detection of just-noticeable differences in gap between sounds. Disorder in the auditory periphery appears to alter the precise timing or latency of synchronous neural discharges important for temporal coding. However, the relative contribution of auditory nerve activities to central temporal processing is unknown. Auditory neuropathy produced significantly worse than normal gap detection within a frequency but normal gap detection between different frequencies. No correlation between same- and different-frequency gap detection supports two temporal processes: a peripheral mechanism dependent on overlapping nerve fibers mediating same-frequency gaps and a central mechanism dependent on cross-correlated activity of non-overlapping fibers mediating different-frequency gaps. The fast, peripheral mechanism enables temporal acuity on the order of milliseconds and is likely limited by neural synchrony, the amount of total nerve activity, or both, whereas the sluggish, central mechanism is likely limited by switching time between perceptual channels on the order of a hundred milliseconds. The results demonstrate auditory nerve activities limit peripheral but not central temporal acuity.