In natural environments our auditory system is exposed to multiple and diverse signals of fluctuating amplitudes. Therefore, to detect, localize, and single out individual sounds the auditory system has to process and filter spectral and temporal information from both ears. It is known that the overall sound pressure level affects sensory signal transduction and therefore the temporal response pattern of auditory neurons. We hypothesize that the mammalian binaural system utilizes a dynamic mechanism to adjust the temporal filters in neuronal circuits to different overall sound pressure levels. Previous studies proposed an inhibitory mechanism generated by the reciprocally coupled dorsal nuclei of the lateral lemniscus (DNLL) as a temporal neuronal-network filter that suppresses rapid binaural fluctuations. Here we investigated the consequence of different sound levels on this filter during binaural processing. Our in vivo and in vitro electrophysiology in Mongolian gerbils shows that the integration of ascending excitation and contralateral inhibition defines the temporal properties of this inhibitory filter. The time course of this filter depends on the synaptic drive, which is modulated by the overall sound pressure level and N-methyl-D-aspartate receptor (NMDAR) signaling. In psychophysical experiments we tested the temporal perception of humans and show that detection and localization of two subsequent tones changes with the sound pressure level consistent with our physiological results. Together our data support the hypothesis that mammals dynamically adjust their time window for sound detection and localization within the binaural system in a sound level dependent manner.