Although there are some indications of the possible role of lateral inhibition in hearing, there has been no clear demonstration of it in psychophysical experiments. Either the phenomenon plays only a minor role, or it has escaped psychophysical verification. Accepting for a moment the second possibility, is argued in this paper that the threshold of a test tone presentedsimultaneouslywith a masker does not reflect clear lateral‐inhibition effects since the inhibition affectsboththe test tone and the masker. Two different methods, in which the test tone and the masker were presentedsuccsesively, give clear psychophysical evidence of lateral inhibition in hearing. Firstly, the threshold curve of short test‐tone bursts presented in the gaps between repeated masker bursts (noise with a steep negative or positive gradient at a particular frequency) shows marked edge effects. Secondly, the results of psychophysical measurements on two‐tone suppression indicate that the nervous activity due to one frequency component may be suppressed by another component. The effect at the edges of the frequency spectrum are comparable with visual Mach bands, and the interaction of two tones is suggestive of the two‐tone inhibition found in auditory‐nerve fibers.