The binaural masking level difference (BMLD) is a phenomenon whereby a signal that is identical at each ear (S0), masked by a noise that is identical at each ear (N0), can be made 12-15 dB more detectable by inverting the waveform of either the tone or noise at one ear (S, N). Single-cell responses to BMLD stimuli were measured in the primary auditory cortex of urethane-anesthetized guinea pigs. Firing rate was measured as a function of signal level of a 500 Hz pure tone masked by low-passed white noise. Responses were similar to those reported in the inferior colliculus. At low signal levels, the response was dominated by the masker. At higher signal levels, firing rate either increased or decreased. Detection thresholds for each neuron were determined using signal detection theory. Few neurons yielded measurable detection thresholds for all stimulus conditions, with a wide range in thresholds. However, across the entire population, the lowest thresholds were consistent with human psychophysical BMLDs. As in the inferior colliculus, the shape of the firing-rate versus signal-level functions depended on the neurons' selectivity for interaural time difference. Our results suggest that, in cortex, BMLD signals are detected from increases or decreases in the firing rate, consistent with predictions of cross-correlation models of binaural processing and that the psychophysical detection threshold is based on the lowest neural thresholds across the population.