In recent EEG investigations [Johnson, 2003] [Hautus, 2005], we described a novel late negative ERP component associated with binaural processing of auditory pitch based solely on interaural timing differences ("dichotic pitch"), an acoustic phenomenon that is closely analogous to visual perception of stereoscopic depth based on retinal disparities. The present study extends this research with neuromagnetic recordings of auditory evoked fields (AEFs) elicited by dichotically-embedded pitches. Eight healthy adult subjects listened to control stimuli consisting of 500 ms segments of broadband acoustic noise presented identically to both ears via earphones, and dichotic pitch stimuli created by introducing a dichotic delay to a narrow frequency region of the same noise segments and resulting in a perception of a pitch lateralized to the left or right of auditory space. Auditory-evoked fields (AEFs) were recorded using a 151 channel whole-head MEG system. Comparison of control and dichotic-pitch AEFs showed reliable amplitude differences during a time window of 150-350 ms. AEFs over the left hemisphere showed larger effects for contralateral than ipsilateral pitches, while the right hemisphere showed no differences for differently lateralized sources. The results indicate a relatively late stage of neural processing of binaurally-derived cues for the perceptual segregation of concurrent sound sources and support a right-hemisphere dominance for the processing of sound-source localization.