For over a century, the Duplex theory has posited that low- and ­high-frequency sounds are localized using two different acoustical cues, interaural time (ITDs) and level (ILDs) differences, respectively. Psychophysical data have generally supported the theory for pure tones. Anatomically, ITDs and ILDs are separately encoded in two parallel brainstem pathways. Acoustically ILDs are a function of location and frequency such that lower and higher frequencies exhibit smaller and larger ILDs, respectively. It is well established that neurons throughout the auditory neuraxis encode high-frequency ILDs. Acoustically, low-frequency ILDs are negligible (∼1–2 dB); however, humans are still sensitive to them and physiological studies often report low-frequency ILD-sensitive neurons. These ­latter findings are at odds with the Duplex theory. We suggest that these discrepancies arise from an inadequate characterization of the acoustical environment. We hypothesize that low-frequency ILDs become large and useful when sources are located near the head. We tested this hypothesis by making measurements of the ILDs in chinchillas as a function of source distance and the sensitivity to ILDs in 103 neurons in the inferior colliculus (IC). The ILD sensitivity of IC neurons was found to be frequency independent even though far-field acoustical ILDs were frequency dependent. However, as source distance was decreased, the magnitudes of low-frequency ILDs increased. Using information theoretic methods, we ­demonstrate that a population of IC neurons can encode the full range of acoustic ILDs across frequency that would be experienced as a joint function of source location and distance.