Two different types of steep loudness growth have been reported in detail in psychoacoustical studies but have rarely been evaluated by objective methods in humans. One occurs in inner-ear hearing-impaired patients and is known as loudness recruitment. Another similar phenomenon is observed in healthy subjects with concurrent presence of background noise. Concerning the first type, our previous study using magnetoencephalography (MEG) showed that enhancement of the dipole moment of N100m with increase in stimulus intensity was greater in patients than in normal individuals. However, it is unclear whether the enhancement of activity in auditory cortex will also be detected with background noise in healthy subjects. To elucidate the effects of continuous background noise on tone-evoked cortical activity, we measured auditory-evoked magnetic fields (AEFs) from 7 normal-hearing subjects in two different conditions, with and without 55 dB SPL continuous masking white noise (noise/quiet conditions). The stimuli were 200 ms 1-kHz tones delivered monaurally and randomly at 4 different intensities (40-70 dB SPL) with constant 1-s interstimulus intervals. The N100m increased in amplitude and decreased in latency as a function of stimulus intensity in both noise and quiet conditions. The dipole moment of N100m was significantly smaller in the noise than in the quiet condition, showing that continuous background noise suppresses the strength of tone-evoked cortical responses. The mechanisms underlying these two psychoacoustically similar phenomena of rapid loudness growth thus differ.