Human cortical responses to the change in spaciousness of sound were recorded with the method of magnetoencephalography (MEG). The phases of dichotically presented 500-Hz tones were shifted so that the sound was perceived as originating either from a point-like source centered in the head or from separated sources in space. The phase shift was embedded in 40-Hz amplitude modulation. Thus, the phase shift could not be detected from a monaural signal. The transition between ‘mono’ and ‘pseudo-stereo’ quality of the sound elicited a P1-N1-P2 response similar to the onset response as well as a decrement in the steady-state response. The responses were discussed as reflecting binaural processing in the central auditory system.