When measured behaviorally, older adults with normal hearing have poorer intensity discrimination thresholds than younger adults, but only at lower frequencies. Poor intensity discrimination at lower but not higher frequencies for older adults can be associated with an age-related decline in temporal processing. The current study was designed to assess age-related effects on intensity discrimination at 500 and 3000 Hz using the cortical auditory evoked potential, N1-P2. Subjects were 10 younger and 10 older adults with normal hearing. The N1-P2 was elicited by an intensity increase in an otherwise continuous pure tone presented at 70 dB SPL. Intensity increments ranged from 0 dB to 5 dB at 500 Hz and from 0 dB to 8 dB at 3000 Hz in 1-dB steps. Intensity discrimination threshold was defined as the smallest intensity change needed to evoke an N1-P2 response. Consistent with behavioral measures, N1-P2 response thresholds were significantly higher for older subjects than younger subjects at 500 Hz but did not differ significantly at 3000 Hz. In addition, N1 and P2 latencies for older subjects were significantly prolonged at 500 Hz, but not at 3000 Hz. As intensity increments increased above threshold, amplitudes tended to be larger in older than in younger subjects, however, these differences were not statistically significant. In older subjects, response latencies and amplitudes were significantly larger at 500 Hz than at 3000 Hz. In younger subjects, response latencies and amplitudes were similar across frequency. Similar intensity discrimination thresholds and age-related differences for behavioral measures and evoked potentials support the notion that the N1-P2 measures reflect the physiological detection of intensity change which in turn relates to intensity discrimination. A possible explanation for the decreased intensity discrimination at low frequencies, and enhanced amplitudes with prolonged latencies in older subjects is an age-related decline in inhibitory control within the central auditory nervous system.