The auditory system detects and processes dynamic sound information transmitted in the environment. Other than the basic acoustic parameters, such as frequency, amplitude and phase, the time-varying changes of these parameters must also be encoded in our brain. Frequency-modulated (FM) sound is socially and environmentally significant, and the direction of FM sweeps is essential for animal communication and human speech. Many auditory neurons selectively respond to the directional change of such FM signals. In the past half century, our knowledge of auditory representation and processing has been updated frequently, due to technological advancement. Recently, in vivo whole-cell voltage clamp recordings have been applied to different brain regions in sensory systems. These recordings illustrate the synaptic mechanisms underlying basic sensory information processing and provide profound insights toward our understanding of neural circuits for complex signal analysis. In this review, we summarize the major findings of direction selectivity at several key auditory regions and emphasize on the recent discoveries on the synaptic mechanisms for direction selectivity in the auditory system. We conclude this review by describing promising technical developments in dissecting neural circuits and future directions in the study of complex sound analysis.