This experiment examines the effects on modulation discrimination interference (MDI) of differences in level between the signal and masker carriers. The task was to detect a change in depth of amplitude modulation of a 1‐kHz signal carrier, in the presence of modulated or unmodulated masker carriers that were either reasonably close to the signal carrier frequency (540 and 1380 Hz) or distant from it (230 and 3300 Hz). The relative level of the signal and masker carriers was systematically varied. The results show that modulated maskers can impair the detection of changes in modulation depth even when the maskers are distant in frequency from the signal carrier and 30–40 dB lower in level than the signal carrier. The magnitude of the interference effect changes only slowly with relative level of the signal and masker carriers, suggesting that the interference depends primarily on across‐channel processes.