Our ability to detect target sounds in complex acoustic backgrounds is often limited not by the ear's resolution, but by the brain's information-processing capacity. The neural mechanisms and loci of this "informational masking" are unknown. We combined magnetoencephalography with simultaneous behavioral measures in humans to investigate neural correlates of informational masking and auditory perceptual awareness in the auditory cortex. Cortical responses were sorted according to whether or not target sounds were detected by the listener in a complex, randomly varying multi-tone background known to produce informational masking. Detected target sounds elicited a prominent, long-latency response (50-250 ms), whereas undetected targets did not. In contrast, both detected and undetected targets produced equally robust auditory middle-latency, steady-state responses, presumably from the primary auditory cortex. These findings indicate that neural correlates of auditory awareness in informational masking emerge between early and late stages of processing within the auditory cortex.