The present manuscript begins with a review of the literature on two‐tone nonlinearity and proceeds to the description of anadhocmodel of auditory nonlinearity which can account for several of the features of the psychophysical data on various two‐tone nonlinearities, in particular, (f2−f1), (2f1−f2), and two‐tone suppression. The two basic components of the model are (1) a nonlinearity which is a series combination of the classical power‐series and compressivep‐law nonlinearities and (2) an intensity‐dependent (nonlinear) filtering scheme. The conceptual model proposed here not only describes the psychophysical data accurately, but also offers possible explanations for some of the apparent discrepancies between psychophysical and physiological data on two‐tone nonlinearities.