A quantitative psychophysiological theory of central masking is developed and partially validated by means of psychophysiological comparisons. The theory assumes constant signal‐to‐noise ratio in the physiological domain for constant signal detectability, partial linear summation of dichotic inputs, and a direct proportionality between driven neural activity and sound intensity at near‐threshold intensities. All assumptions are based on psychophysical and physiological evidence independent of central masking. The theory is shown to predict accurately single‐unit characteristics of the auditory nerve and of primary‐like populations in the cochlear nuclei and the superior olive. Validating comparisons between calculated and empirical results are made in time, frequency, and intensity domains, for steady‐state and transient stimuli.