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Repeating a recorded word produces verbal transformations (VTs); perceptual regrouping of acoustic-phonetic elements may contribute to this effect. The influence of fundamental frequency (F0) and lateralization grouping cues was explored by presenting two concurrent sequences of the same word resynthesized on different F0s (100 and 178 Hz). In experiment 1, listeners monitored both sequences simultaneously, reporting for each any change in stimulus identity. Three lateralization conditions were used – diotic, ±680-μs interaural time difference, and dichotic. Results were similar for the first two conditions, but fewer forms and later initial transformations were reported in the dichotic condition. This suggests that large lateralization differences per se have little effect – rather, there are more possibilities for regrouping when each ear receives both sequences. In the dichotic condition, VTs reported for one sequence were also more independent of those reported for the other. Experiment 2 used diotic stimuli and explored the effect of the number of sequences presented and monitored. The most forms and earliest transformations were reported when two sequences were presented but only one was monitored, indicating that high task demands decreased reporting of VTs for concurrent sequences. Overall, these findings support the idea that perceptual regrouping contributes to the VT effect.We explored the role of auditory grouping cues in the verbal transformation effect.Listeners were asked to monitor two concurrent sequences of the same word.More verbal forms were reported when the sequences could interact in the same ear.Monitoring both sequences at once leads to underestimation of transformations.Within-ear interaction increases the opportunity for segregation and regrouping.