In a previous paper the author tried to show that hypothesized mechanical impact and mechanical fatigue processes in the cochlea are consistent with a range of psychophysical data on auditory fatigue and non‐linear effects (e.g., mechanical impact between the hair cells and tectorial membrane, and mechanical fatigue in terms of the viscoelastic or gel properties of the tectorial membrane). The present paper explores the extent to which mechanical processes of this type are also consistent with the recent findings of Goldstein [J. Acoust. Soc. Amer.41, 676–689 (1967)] regarding combination tones in the cochlea. We develop the idea of a hair vibrating in a pocket within the tectorial membrane, which is formed by the local movement of the hair. It is assumed that this pocket tends to close around the hair with some specified time constant. It is shown that impact between a single hair and the ends of the pocket generates the main features of the combination tone sequence found by Goldstein. Other combination tones are also generated, though it is argued that these might be discriminated against in a completely distributed impact model. The most important feature of this impact and fatigue mechanism is a dynamic change in pocket size that provides the normalization factor that the data demands, since the relative strength of the combination tones is found experimentally to be independent of input level.