For human listeners, the primary cues for localization in the vertical plane are provided by the direction-dependent filtering of the pinnae, head, and upper body. Vertical-plane localization generally is accurate for broadband sounds, but when such sounds are presented at near-threshold levels or at high levels with short durations (<20 ms), the apparent location is biased toward the horizontal plane (i.e., elevation gain <1). We tested the hypothesis that these effects result in part from distorted peripheral representations of sound spectra. Human listeners indicated the apparent position of 100-ms, 50–60dB SPL, wideband noise-burst targets by orienting their heads. The targets were synthesized in virtual auditory space and presented over headphones. Faithfully synthesized targets were interleaved with targets for which the directional transfer function spectral notches were filled in, peaks were levelled off, or the spectral contrast of the entire profile was reduced or expanded. As notches were filled in progressively or peaks levelled progressively, elevation gain decreased in a graded manner similar to that observed as sensation level is reduced below 30dB or, for brief sounds, increased above 45dB. As spectral contrast was reduced, gain dropped only at the most extreme reduction (25% of normal). Spectral contrast expansion had little effect. The results are consistent with the hypothesis that loss of representation of spectral features contributes to reduced elevation gain at low and high sound levels. The results also suggest that perceived location depends on a correlation-like spectral matching process that is sensitive to the relative, rather than absolute, across-frequency shape of the spectral profile.