Sensitivity to the similarity of the acoustic waveforms at the two ears, and specifically to changes in similarity, is crucial to auditory scene analysis and extraction of objects from background. Here, we use the high temporal resolution of magnetoencephalography to investigate the dynamics of cortical processing of changes in interaural correlation, a measure of interaural similarity, and compare them with behavior. Stimuli are interaurally correlated or uncorrelated wideband noise, immediately followed by the same noise with intermediate degrees of interaural correlation. Behaviorally, listeners' sensitivity to changes in interaural correlation is asymmetrical. Listeners are faster and better at detecting transitions from correlated noise than transitions from uncorrelated noise. The cortical response to the change in correlation is characterized by an activation sequence starting from approximately 50 ms after change. The strength of this response parallels behavioral performance: auditory cortical mechanisms are much less sensitive to transitions from uncorrelated noise than from correlated noise. In each case, sensitivity increases with interaural correlation difference. Brain responses to transitions from uncorrelated noise lag those from correlated noise by approximately 80 ms, which may be the neural correlate of the observed behavioral response time differences. Importantly, we demonstrate differences in location and time course of neural processing: transitions from correlated noise are processed by a distinct neural population, and with greater speed, than transitions from uncorrelated noise.