1. Response parameters of S-segment neurones of the FM bat Myotis lucifugus were measured as a sound was delivered from different azimuthal angles around the animal's head. 2. The response parameters investigated were the amplitude and threshold of the evoked potential (N3) of the S-segment, together with the threshold, latency and number of impulses (per stimulus pulse) of single units. 3. All the neurones studied had their lowest thresholds either at 20-40 degrees contralateral, or 20-40 degrees ipsilateral or at the front (0 degrees). 4. The amplitude of the sound affected the relationship between stimulus direction and the amplitude of a non-monotonic N3, and the relationship between stimulus direction and the number of impulses of a non-monotonic single unit. It had so such effects with a monotonic N3 and a monotonic single unit. 5. From a study of N3 amplitudes and numbers of impulses of single neurones, it appeared that an azimuthal difference as small as 3 degrees could be easily coded at a 95% correct level with stimuli presented at around 20 degrees ipsilateral, 20 degrees contralateral, and at the front. 6. The inter-aural pressure difference (IPD), which is considered an essential cue for echolocation in Myotis (Shimozawa et al. 1974), changed linearly with angle from 0 to 40 degrees lateral at a rate of 0.4 dB/degree for sounds between 33.5 and 49.0 kHz. 7. Assuming the just-detectable IPD to be 0.5 dB (as in man), the minimum detectable azimuthal difference of Myotis around the median plane would be 1.25 degrees.