Sequences of rapidly occurring sounds that differ from each other are often perceptually segregated into ‘‘streams’’ within which the range of differences is smaller [Bregman and Campbell, J. Exp. Psychol.89, 244–249 (1971)]. Early research on streaming implied it to be pitch dominated, but Wessel [Comput. Music J.3, 45–52 (1979)] demonstrated that timbre differences could also bring about segregation. In the present study, pitch and timbre attributes were put in competition in four‐tone sequences of the form:T2P1‐TmP1‐T2Pn‐TmPn, with the first pair assigned pitchP1but different timbresT2andTm, and the second pair pitchPn, and similarly contrasted timbres. Six listeners were asked to indicate whether perceived grouping of 49 such sequences was based on pitch proximity, timbre similarity, or ambiguous percepts not dominated by either cue. Results confirm that timbre can segregate sequences and imply that timbre and pitch compete in perceptually organizing complex sequences. Because timbre differences were provided by varying the locus of four equal‐amplitude harmonics, and pitch differences were provided by varying their relative spacing, it is suggested that the tradeoffs observed may actually arise due to differences in perceived salience of ‘‘spectral pitch’’ and ‘‘virtual pitch’’ [Terhardt, J. Acoust. Soc. Am.55, 1061–1069 (1974)] dependent on relative changes in spectral locus and spectral spacing over time.