Most sounds in the natural environment are amplitude-modulated. To determine if amplitude modulation alters the neuronal sensitivity to interaural time differences (ITDs) in low-frequency sounds, we tested neuronal responses to a binaural beat stimulus, with and without modulation. We recorded from single units in the inferior colliculus of the unanesthetized rabbit. We primarily used low frequency (~25 Hz) modulation that was identical at both ears. We found that modulation could enhance,suppress, or not affect the discharge rate. In extreme cases, a neuron that showed no response to the unmodulated binaural beat did so when modulation was added to both ears. At the other extreme, a neuron that showed sensitivity to the unmodulated binaural beat ceased firing with modulation. Modulation could also affect the frequency range of ITD-sensitivity, best ITD, and ITD tuning width. Despite these changes in individual neurons, averaging across all neurons, the peak and width of the population ITD function remained unchanged. Since ITD-sensitive neurons also time-locked to the modulation frequency, the location and sound attributes are processed simultaneously by these neurons.