The neural mechanisms that support the robust processing of acoustic signals in the presence of background noise in the auditory system remain largely unresolved. Psychophysical experiments have shown that signal detection is influenced by the signal-to-noise ratio (SNR) and the overall stimulus level, but this relationship has not been fully characterized. We evaluated the neural representation of frequency in rat primary auditory cortex by constructing tonal frequency response areas (FRAs) in primary auditory cortex for different SNRs, tone levels, and noise levels. We show that response strength and selectivity for frequency and sound level depend on interactions between SNRs and tone levels. At low SNRs, jointly increasing the tone and noise levels reduced firing rates and narrowed FRA bandwidths; at higher SNRs, however, increasing the tone and noise levels increased firing rates and expanded bandwidths, as is usually seen for FRAs obtained without background noise. These changes in frequency and intensity tuning decreased tone level and tone frequency discriminability at low SNRs. By contrast, neither response onset latencies nor noise-driven steady-state firing rates meaningfully interacted with SNRs or overall sound levels. Speech detection performance in humans was also shown to depend on the interaction between overall sound level and SNR. Together, these results indicate that signal processing difficulties imposed by high noise levels are quite general and suggest that the neurophysiological changes we see for simple sounds generalize to more complex stimuli. CONCLUSIONS Effective processing of sounds in background noise is an important feature of the mammalian auditory system and a necessary feature for successful hearing in many listening conditions. Even mild hearing loss strongly affects this ability in humans, seriously degrading the ability to communicate. The mechanisms involved in achieving high performance in background noise are not well understood. We investigated the effects of SNR and overall stimulus level on the frequency tuning of neurons in rat primary auditory cortex. We found that the effects of noise on frequency selectivity are not determined solely by the SNR but depend also on the levels of the foreground tones and background noise. These observations can lead to improvement in therapeutic approaches for hearing-impaired patients.