Stimulation of medial olivocochlear (MOC) efferent neurons reduces basilar membrane (BM) sensitivity and increases the slope of BM input-output (I/O) functions in animal models. Decreased compression of I/O functions associated with activation of MOC efferent neurons may assist in extending the neural response to the tone above that of noise, leading to an improvement in masked thresholds. To evaluate this hypothesis, the distortion-product otoacoustic emission (DPOAE) I/O function, a proxy measure of BM compression, was examined in conditions with presentation of contralateral noise. DPOAE I/O functions were measured at f2 frequencies of 1000 and 2000 Hz in 16 normal-hearing adults. In each subject, estimation of masked thresholds at 1000 and 2000 Hz was provided by a two-interval forced-choice procedure. There were statistically significant associations between DPOAE I/O function slopes and masked tone thresholds at both 1000 and 2000 Hz. At 1000 Hz, individuals with higher DPOAE I/O function slopes exhibited lower masked thresholds. Data at 2000 Hz indicated that individuals with higher masked thresholds exhibited higher DPOAE I/O function slopes. When measured with contralateral noise, DPOAE I/O function slopes were linked to masked thresholds at both frequencies examined in this study. Linearized DPOAE I/O functions presumably reflect linearized BM growth functions under conditions of MOC efferent activation, and this process may have extended the neural response to the signal tone so that it could be more easily heard in the presence of masking noise under certain conditions examined in this study.