Frequency-elevation mapping (FEM) describes how listeners systematically mislocalize sounds in vertical space: high-pitched sounds appear elevated while low-pitched sounds seem lower than their actual positions. This phenomenon shapes how we experience sound in space, yet its underlying mechanisms remain debated, with some suggesting the main influence of statistical learning based on sounds naturally occurring in the environment, whereas others supporting the main linguistic or cultural contribution. We investigated FEM using violin, flute, and spectrally-matched artificial sounds across nine frequencies (200–1600 Hz) and five elevation angles. Twenty-nine participants localized these sounds while we manipulated both spectral centroid and musical context to disentangle local and global context contributions to the effect. Our results show that FEM is primarily driven by fundamental frequency rather than spectral content. While spectral centroid slightly influenced elevation perception at low frequencies, this effect vanished at higher frequencies. Crucially, musical instruments showed significantly weaker FEM effects compared to artificial sounds with identical spectral properties. Local context also mattered: the interval between successive notes influenced spatial perception. These findings show that musical knowledge can outweigh fundamental psychoacoustic expectations. Recognition of a musical instrument as a coherent sound source capable of producing multiple pitches reduces FEM effect. This demonstrates how musical and contextual understanding actively shape our perception of auditory space, transforming abstract frequency relationships into a meaningful spatial experience within musical environment.