Spontaneous oscillatory electrical activity at a frequency near 40 Hz in the human brain and its reset by sensory stimulation have been proposed to be related to cognitive processing and to the temporal binding of sensory stimuli. These experiments were designed to test this hypothesis and to determine specifically whether the minimal interval required to identify separate auditory stimuli correlates with the reset of the 40-Hz magnetic signal. Auditory clicks were presented at varying times, while magnetic activity was recorded from awake human subjects. Experimental and modeling results indicate a stimulus-interval-dependent response with a critical interval of 12-15 ms. At shorter intervals only one 40-Hz response, to the first stimulus, was observed. With longer intervals, a second 40-Hz wave abruptly appeared, which coincided with the subject's perception of a second distinct auditory stimulus. These results indicate that oscillatory activity near 40 Hz represents a neurophysiological correlate to the temporal processing of auditory stimuli. It also supports the view that 40-Hz activity not only relates to primary sensory processing, but also could reflect the temporal binding underlying cognition.