Investigators have demonstrated that the 2f1‐f2cubic difference tone (CDT) behaves in many respects as if a physical tone at the CDT frequency were actually present in the acoustic stimulus [J. L. Goldstein, G. Buchsbaum, and M. Furst, J. Acoust. Soc. Am.63, 474–485 (1978)]. We further examined this property of the CDT by asking whether a binaural masking level difference (BMLD) can be obtained through the interaction of a 500‐Hz physical tone to one ear and a CDT of the same frequency to the other ear. Thresholds for the physical tone were obtained as the phase of this tone varied through 360° relative to harmonically related primaries (f1equals; 625 Hz,f2= 750 Hz). A continuous low‐pass (2000 Hz) diotic noise comprised the masking stimulus. The level of this noise varied to establish thresholds in a two‐interval same‐different adaptive procedure with the primaries occurring in both observation intervals. In keeping with other physical stimulus‐like properties of the CDT, the results show BMLDs of 10–13 dB. CDT phase and level estimates derived from additional BMLDs are compared to estimates obtained with the traditional cancellation procedure. The implication of these results regarding the physiological origin of the CDT is discussed.