In the ascending auditory pathway, the context in which a particular stimulus occurs can influence the character of the responses that encode it. Here we demonstrate that the cortical representation of a binaural cue to sound source location is profoundly context-dependent: spike rates elicited by a 0 degrees interaural phase disparity (IPD) were very different when preceded by 90 degrees versus -90 degrees IPD. The changes in firing rate associated with equivalent stimuli occurring in different contexts are comparable to changes in discharge rate that establish cortical tuning to the cue itself. Single-unit responses to trapezoidally modulated IPD stimuli were recorded in the auditory cortices of awake rhesus monkeys. Each trapezoidal stimulus consisted of linear modulations of IPD between two steady-state IPDs differing by 90 degrees. The stimulus set was constructed so that identical IPDs and sweeps through identical IPD ranges recurred as elements of disparate sequences. We routinely observed orderly context-induced shifts in IPD tuning. These shifts reflected an underlying enhancement of the contrast in the discharge rate representation of different IPDs. This process is subserved by sensitivity to stimulus events in the recent past, involving multiple adaptive mechanisms operating on timescales ranging from tens of milliseconds to seconds. These findings suggest that the cortical processing of dynamic acoustic signals is dominated by an adaptive coding strategy that prioritizes the representation of stimulus changes over actual stimulus values. We show how cortical selectivity for motion direction in real space could emerge as a consequence of this general coding principle.