Acoustic clicks were presented through earphones to the two ears of anesthetized cats, and the electrical response activity of single nerve cells in the accessory nucleus of the superior olive was studied. Stimulus parameters investigated included interaural time difference, interaural intensity difference, and average intensity. Attention was concentrated on cells that were excited by stimulation of the contralateral ear and inhibited by stimulation of the ipsilateral ear. The experimental results are incorporated into van Bergeijk's model for binaural interaction, for which it is postulated that localization judgments are obtained on the basis of a comparison of the amounts of response activity in the two accessory nuclei. The model yields predictions that are in agreement with results from human psychophysics. The model predicts that the virtual image should be lateralized toward the side receiving prior or more intense stimulation. A time‐intensity trading relationship that is in agreement with results from “centering” experiments is derived. The model predicts minimum detectable changes in interaural time difference of 5–10 μsec and minimum detectable changes in interaural intensity difference of 0.1–0.5 dB.