Dichotic listening (DL) is a neuropsychological technique for the study of functional laterality. Based on behavioral patient studies, the "structural theory" states that lateralization of the auditory input during DL is allowed by an inhibition of the ipsilateral pathways. We aimed here at extending this theory to provide a neurophysiological basis of verbal DL. We investigated the magnetic responses of the primary auditory cortices elicited by dichotic consonant-vowel syllables. Dichotic stimuli consisted of 2 syllables pairs, a "competing" one composed by syllables with high spectral overlap (/da/ and /ba/) and a "noncompeting" pair (/da/ and /ka/). One of the syllables in each pair was delivered at 2 intensities, whereas the other did not change. A reduced increase of source intensity in response to dichotic pairs at the 2 levels was assumed to indicate pathway inhibition effects. We obtained that the left ipsilateral pathway (i.e., the left ipsilateral signal) was strongly inhibited by the right contralateral one. Conversely, the right ipsilateral pathway did not show an inhibition larger than the left contralateral one. These results extend the notion of auditory functional asymmetries by showing that beyond hemispheric functional specialization there is an asymmetry within the ascending auditory system, which is based on a competition mechanism. The larger the competition between the left and right ear stimuli, the larger are the inhibition effects, which determine the pathway asymmetry. These findings represent as well a neurophysiological basis for the "structural theory" explaining the right ear preference usually found in verbal DL tasks.