Sinusoidally amplitude-modulated (AM) tones are frequently used in psychophysical and physiological studies, yet a comprehensive study on the coding of AM tones in the auditory nerve is lacking. AM responses of single auditory-nerve fibers of the cat are studied, systematically varying modulation depth, frequency, and sound level. Synchrony-level functions were nonmonotonic with maximum values that were inversely correlated with spontaneous rate (SR). In most fibers, envelope phase-locking showed a positive gain. Modulation transfer functions were uniformly low pass. Their corner frequency increased with characteristic frequency (CF), but changed little for CFs above 10 kHz. The highest modulation frequencies to which phase locking occurred were more than 0.8 oct lower than the highest frequencies to which phase locking to pure tones occurs. Cumulative, or unwrapped, phase increased linearly with modulation frequency: The slope was inversely related to CF, and slightly higher than group delays reported for pure tones. High SR, low CF fibers showed the poorest envelope phase locking. In some low CF fibers, phase locking increased at high levels, associated with "peak-splitting" phenomena. Changes in average rate due to modulation were small, and could be enhancement or suppression.