Coincidence-detector neurons in the auditory brainstem of mammals and birds use interaural time differences to localize sounds. Each neuron receives many narrow-band inputs from both ears and compares the time of arrival of the inputs with an accuracy of 10-100 micros. Neurons that receive low-frequency auditory inputs (up to about 2 kHz) have bipolar dendrites, and each dendrite receives inputs from only one ear. Using a simple model that mimics the essence of the known electrophysiology and geometry of these cells, we show here that dendrites improve the coincidence-detection properties of the cells. The biophysical mechanism for this improvement is based on the nonlinear summation of excitatory inputs in each of the dendrites and the use of each dendrite as a current sink for inputs to the other dendrite. This is a rare case in which the contribution of dendrites to the known computation of a neuron may be understood. Our results show that, in these neurons, the cell morphology and the spatial distribution of the inputs enrich the computational power of these neurons beyond that expected from 'point neurons' (model neurons lacking dendrites).