Psychophysical two‐tone suppression was measured in three normal‐hearing young adults using the pulsation‐threshold technique. The primary objective was to study the effect ofL1on psychophysical two‐tone suppression forf2/f1≳1.0. Measurements were obtained at low and mid frequencies and for input levels ranging from 40 through 85 dB SPL. Forf1=1000 or 2000 Hz, suppression increased initially withL1and then decreased forL1?55 to 70 dB SPL. Forf1=500 Hz, however, suppression increased monotonically throughout the range ofL1values examined. These findings are explained by assuming that forf1?1000 Hz the nonlinear mechanism responsible for two‐tone suppression is very susceptible to reversible dysfunction produced by the presentation of high‐intensity stimuli.