This paper reviews interference effects in the auditory system, particularly effects occurring in the outer ear and the inner ear (cochlea). Sounds enter the ear canal both directly and after reflections from the pinna. This results in complex spectral patterns, which vary systematically with the direction of incidence of the sound source relative to the head. Evidence is described indicating that these spectral patterns are used in the localization of sounds in space. The cochlea behaves like a limited-resolution frequency analyser. When the components of a complex sound are closely spaced in frequency, they can interfere on the basilar membrane (BM) within the cochlea. Interference effects on the BM are complex, as they are influenced by a physiologically active mechanism which introduces strong nonlinearities, including level-dependent amplification. Interference effects on the BM play a role in many aspects of auditory perception, including the perception of consonance and dissonance, the perception of pitch, the perception of changes in phase, and the perception of timbre. Interference effects in the cochlea may also play a role in producing the spectral regularity observed in sounds reflected from the ear (otoacoustic emissions).