Amplitude modulation (AM) is a pervasive feature of natural sounds. Neural detection and processing of modulation cues is behaviourally important across species. Although most ecologically relevant sounds are not fully modulated, physiological studies have usually concentrated on fully modulated (100% modulation depth) signals. Psychoacoustic experiments mainly operate at low modulation depths, around detection threshold (˜5% AM). We presented sinusoidal amplitude-modulated tones, systematically varying modulation depth between zero and 100%, at a range of modulation frequencies, to anaesthetised guinea-pigs while recording spikes from neurons in the ventral cochlear nucleus (VCN). The cochlear nucleus is the site of the first synapse in the central auditory system. At this locus significant signal processing occurs with respect to representation of AM signals. Spike trains were analysed in terms of the vector strength of spike synchrony to the amplitude envelope. Neurons showed either low-pass or band-pass temporal modulation transfer functions, with the proportion of band-pass responses increasing with increasing sound level. The proportion of units showing a band-pass response varies with unit type: sustained chopper (CS) > transient chopper (CT) > primary-like (PL). Spike synchrony increased with increasing modulation depth. At the lowest modulation depth (6%), significant spike synchrony was only observed near to the unit's best modulation frequency for all unit types tested. Modulation tuning therefore became sharper with decreasing modulation depth. AM detection threshold was calculated for each individual unit as a function of modulation frequency. Chopper units have significantly better AM detection thresholds than do primary-like units. AM detection threshold is significantly worse at 40 dB vs. 10 dB above pure-tone spike rate threshold. Mean modulation detection thresholds for sounds 10 dB above pure-tone spike rate threshold at best modulation frequency are (95% CI) 11.6% (10.0–13.1) for PL units, 9.8% (8.2–11.5) for CT units, and 10.8% (8.4–13.2) for CS units. The most sensitive guinea-pig VCN single unit AM detection thresholds are similar to human psychophysical performance (˜3% AM), while the mean neurometric thresholds approach whole animal behavioural performance (˜10% AM).