Melody recognition is an online process of evaluating incoming information and comparing this information to an existing internal corpus, thereby reducing prediction error. The predictive-coding model postulates top-down control on sensory processing accompanying reduction in prediction error. To investigate the relevancy of this model to melody processing, the current study examined early magnetoencephalogram (MEG) auditory responses to familiar and unfamiliar melodies in 25 participants. The familiar melodies followed and primed an octave-scrambled version of the same melody. The retrograde version of theses melodies served as the unfamiliar control condition. Octave-transposed melodies were included to examine the influence of pitch representation (pitch-height/pitch-chroma representation) on brain responses to melody recognition. Results demonstrate a reduction of the M100 auditory response to familiar, as compared with unfamiliar, melodies regardless of their form of presentation (condensed vs. octave-scrambled). This trend appeared to begin after the third tone of the melody. An additional behavioral study with the same melody corpus showed a similar trend—namely, a significant difference between familiarity rating for familiar and unfamiliar melodies, beginning with the third tone of the melody. These results may indicate a top-down inhibition of early auditory responses to melodies that is influenced by pitch representation.