The studies presented here use an adapted oddball paradigm to show evidence that representations of discrete phonological categories are available to the human auditory cortex. Brain activity was recorded using a 37-channel biomagnetometer while eight subjects listened passively to synthetic speech sounds. In the phonological condition, which contrasted stimuli from an acoustic /dae/-/tae/ continuum, a magnetic mismatch field (MMF) was elicited in a sequence of stimuli in which phonological categories occurred in a many-to-one ratio, but no acoustic many-to-one ratio was present. In order to isolate the contribution of phonological categories to the MMF responses, the acoustic parameter of voice onset time, which distinguished standard and deviant stimuli, was also varied within the standard and deviant categories. No MMF was elicited in the acoustic condition, in which the acoustic distribution of stimuli was identical to the first experiment, but the many-to-one distribution of phonological categories was removed. The design of these studies makes it possible to demonstrate the all-or-nothing property of phonological category membership. This approach contrasts with a number of previous studies of phonetic perception using the mismatch paradigm, which have demonstrated the graded property of enhanced acoustic discrimination at or near phonetic category boundaries.