The encoding mechanisms for amplitude modulation (AM) and frequency modulation (FM) were investigated using AM–FM discrimination tasks. In the first experiment, AM and FM were set at equally detectable levels within a trial, and discrimination thresholds were obtained adaptively in a 3IFC task. Here, AM–FM discrimination thresholds were considerably larger than both AM and FM detection thresholds. This is consistent with an encoding system whereby AM and FM are partially encoded by the same mechanism. In the second experiment, performance on AM–FM discrimination is measured with a fixed-level procedure. Psychometric functions obtained for a constant modulation depth of AM were nonmonotonic with FMs modulation index β and each displayed a single minimum. The nonmonotonic nature of the functions is consistent with a model in which FM is encoded primarily with the same mechanism that encodes AM but also with a second mechanism, probably related to changes in instantaneous frequency, that is independent of the mechanism that extracts AM. The fact that minima in the discrimination psychometric functions increase from d′=0 as β increases indicates that the information encoded by the second mechanism becomes more detectable with increasing β.