The effect of binaural decorrelation on the processing of interaural level difference cues in the barn owl (Tyto alba) was examined behaviorally and electrophysiologically. The electrophysiology experiment measured the effect of variations in binaural correlation on the first stage of interaural level difference encoding in the central nervous system. The responses of single neurons in the posterior part of the ventral nucleus of the lateral lemniscus were recorded to stimulation with binaurally correlated and binaurally uncorrelated noise. No significant differences in interaural level difference sensitivity were found between conditions. Neurons in the posterior part of the ventral nucleus of the lateral lemniscus encode the interaural level difference of binaurally correlated and binaurally uncorrelated noise with equal accuracy and precision. This nucleus therefore supplies higher auditory centers with an undegraded interaural level difference signal for sound stimuli that lack a coherent interaural time difference. The behavioral experiment measured auditory saccades in response to interaural level differences presented in binaurally correlated and binaurally uncorrelated noise. The precision and accuracy of sound localization based on interaural level difference was reduced but not eliminated for binaurally uncorrelated signals. The observation that barn owls continue to vary auditory saccades with the interaural level difference of binaurally uncorrelated stimuli suggests that neurons that drive head saccades can be activated by incomplete auditory spatial information.