Two‐channel auditory signal detection was investigated with narrow‐band noise signals masked by independent, binaurally uncorrelated noise. The two‐channel tasks included conditions where the signals in each channel were correlated, uncorrelated, or opposite in phase. No significant differences were observed between the single‐channel conditions and the two‐channel correlated signal condition, but performance in the uncorrelated and 180° phase conditions was significantly poorer. A comprehensive analysis of cross‐channel interaction indicated a cross‐channel inhibitory or masking effect, which may be counteracted by the presence of lateralization cues. Constraints on signal detectability due to a limited processing capacity appeared to be negligible.