The onset‐time difference ΔTrequired to lateralize a 30‐ms bifrequency tone burst toward the leading ear was measured as a function of the frequency difference ΔFbetween the tone in the left ear and the tone in the right ear. At center frequencies of 0.5 and 4 kHz, four normal listeners tested at 80 and 100 dB SPL had ΔTs that were relatively constant at subcritical ΔFs, but increased at ΔFs wider than a critical band. At 1 kHz, ΔTincreased with ΔFeven at subcritical ΔFs. Ten listeners with cochlear impairments were tested at 100 dB SPL. Seven had normal ΔTs at 4 kHz, despite hearing losses between 50 and 70 dB. At 0.5 and 1 kHz, mildly impaired listeners had nearly normal lateralization functions, whereas more severely impaired listeners had very large ΔTs and no frequency selectivity. These and other findings indicate that listeners even with moderate to severe hearing losses can lateralize normally on the basis of interaural differences in onset envelope, but not on the basis of temporal differences in the fine structure.