An experiment was conducted to measure observers' ability to detect time-varying interaural intensity differences (IIDs). In a two-interval forced-choice task, observers discriminated a binaural amplitude modulated (AM) noise in which the modulating sinusoid was interaurally in-phase from the same AM noise in which the modulator was interaurally phase-reversed. The latter stimulus produces a sinusoidally varying IID whose rate and peak IID depend on the frequency (fm) and depth (m) of modulation. The carrier was a narrow-band noise, interaurally uncorrelated, centered at 500, 1000, or 4000 Hz. Presentation level was 75 dB SPL; duration was 1.0 s. For a given fm, m was varied in an adaptive procedure to estimate the depth required for 71% discriminability (mthr). Three of the four observers displayed "low-pass" modulation functions: at 500 Hz, as fm increased from 0-50 Hz, mthr increased from 0.08 (IID = 1.3 dB) to 0.50 (peak IID = 9.5 dB). At 1000 and 4000 Hz observers were more sensitive to IID and the functions (mthr vs fm) were flatter than at 500 Hz. Comparison of these data to previously published data indicates that the binaural system can follow fluctuations in IID more efficiently than it can follow fluctuations in interaural time difference, although there are large individual differences in subjects' capacity to process these two types of binaural cues.