Spoken word recognition models and phonological theory propose that abstract features play a central role in speech processing. It remains unknown, however, whether auditory cortex encodes linguistic features in a manner beyond the phonetic properties of the speech sounds themselves. We took advantage of the fact that English phonology functionally codes stops and fricatives as voiced or voiceless with two distinct phonetic cues: Fricatives use a spectral cue, whereas stops use a temporal cue. Evidence that these cues can be grouped together would indicate the disjunctive coding of distinct phonetic cues into a functionally defined abstract phonological feature. In English, the voicing feature, which distinguishes the consonants [s] and [t] from [z] and [d], respectively, is hypothesized to be specified only for voiceless consonants (e.g., [s t]). Here, participants listened to syllables in a many-to-one oddball design, while their EEG was recorded. In one block, both voiceless stops and fricatives were the standards. In the other block, both voiced stops and fricatives were the standards. A critical design element was the presence of intercategory variation within the standards. Therefore, a many-to-one relationship, which is necessary to elicit an MMN, existed only if the stop and fricative standards were grouped together. In addition to the ERPs, event-related spectral power was also analyzed. Results showed an MMN effect in the voiceless standards block—an asymmetric MMN—in a time window consistent with processing in auditory cortex, as well as increased prestimulus beta-band oscillatory power to voiceless standards. These findings suggest that (i) there is an auditory memory trace of the standards based on the shared (voiceless) feature, which is only functionally defined; (ii) voiced consonants are underspecified; and (iii) features can serve as a basis for predictive processing. Taken together, these results point toward auditory cortex's ability to functionally code distinct phonetic cues together and suggest that abstract features can be used to parse the continuous acoustic signal.