This paper presents a fairly complete review of detection theory as it is applied to certain psychoacoustic data. Detection theory is treated as a combination of two theoretical structures: decision theory and the concept of ideal observer. The paper discusses how statistical decision theory has been used to analyze the auditory threshold process. By treating the threshold process as an instance of hypothesis testing, two determinants of the process are recognized: (1) the detectability of the signal and (2) the criterion level of the observer. The theory provides a technic of analysis which allows one to obtain a quantitative estimate of both factors. The measure of signal detectability appears to be independent of the psychophysical procedure when the physical parameters of signal and noise are held constant. The concept of ideal observer is reviewed with special emphasis on the assumptions of the derivation. The usefulness of this concept is illustrated by considering the shape of the psychophysical function—the function relating the detectability of the signal to its intensity. A rather general model based on the concept of signal uncertainty is presented which attempts to explain this relationship.