SUMMARY Sound localization is a fundamental auditory ability that is facilitated by differences in the sound reaching each ear. Localization is important for safety and for auditory awareness in natural 3D environments. Binaural hearing also supports spatial release from masking, where detection and recognition are improved by spatially separating the primary source – the target – and interfering sources – the masker. Spatial release from masking is critical for speech recognition in noisy backgrounds, especially when the background contains competing speech. What we do not understand yet is the relationship between these two phenomena of binaural hearing – localization and spatial release from masking. The studies in this project ask whether sound localization and spatial release from masking arise from the same binaural mechanisms but are otherwise not closely related, or whether sound localization is the basis of spatial release from masking, particularly in situations were targets and maskers are highly confusable with one another. It is an important question, because listener complaints about hearing difficulties in noise might well be due to poor sound localization, although this is not evaluated in clinical practice. While there have been hints of a causal relationship in the literature, the question is a difficult one to answer and the field has not come to a consensus. This three-year project will be the first that we are aware of to singularly and comprehensively focus on the relationship between sound localization and spatial release from masking, using rigorous psychoacoustic methods with recently developed signal processing tools and stimuli that dissociate binaural difference cues and perceived intracranial location. The findings will help us make sense of the conflicting literature that has been difficult to interpret, and will move the field toward theoretical and practical advances that will help inform professional management of hearing loss and its consequences for listening in noise.