Principal neurons (PNs) of the lateral superior olive nucleus (LSO) in the brainstem of mammals compare information between the two ears and enable sound localization on the horizontal plane. The classical view of the LSO is that it extracts ongoing interaural level differences (ILDs). Although it has been known for some time that LSO PNs have intrinsic relative timing sensitivity, recent reports further challenge conventional thinking, suggesting the major function of the LSO is detection of interaural time differences (ITDs). LSO PNs include inhibitory (glycinergic) and excitatory (glutamatergic) neurons which differ in their projection patterns to higher processing centers. Despite these distinctions, intrinsic property differences between LSO PN types have not been explored. The intrinsic cellular properties of LSO PNs are fundamental to how they process and encode information, and ILD/ITD extraction places disparate demands on neuronal properties. Here we examine the ex vivo electrophysiology and cell morphology of inhibitory and excitatory LSO PNs in mice. Although overlapping, properties of inhibitory LSO PNs favor time coding functions while those of excitatory LSO PNs favor integrative level coding. Inhibitory and excitatory LSO PNs exhibit different activation thresholds, potentially providing further means to segregate information in higher processing centers. Near activation threshold, which may be physiologically similar to the sensitive transition point in sound source location for LSO, all LSO PNs exhibit single-spike onset responses that can provide optimal time encoding ability. As stimulus intensity increases, LSO PN firing patterns diverge into onset-burst cells, which can continue to encode timing effectively regardless of stimulus duration, and multi-spiking cells, which can provide robust individually integrable level information. This bimodal response pattern may produce a multi-functional LSO which can encode timing with maximum sensitivity and respond effectively to a wide range of sound durations and relative levels.