Auditory scene analysis requires the accurate encoding and comparison of the perceived spatial positions of sound sources. The electrophysiological correlates of auditory spatial discrimination and their relationship to performance accuracy were studied in humans by applying electrical neuroimaging analyses to auditory evoked potentials (AEPs) that were recorded during the completion of a near-threshold S1–S2 paradigm within the right hemispace. Data were sorted as a function of performance accuracy, and AEP responses 75–117 ms after the presentation of the first sound differed topographically between trials leading to correct and incorrect spatial discrimination. Distributed source estimations revealed that this followed from significantly stronger activity within the left (i.e. contralateral) supratemporal plane (STP) and the left inferior parietal lobule prior to correct versus incorrect discrimination performance. Successful spatial discrimination thus depends on the activity of distinct configurations of active brain networks within the contralateral temporo-parietal cortex over a time period when the first sound position is being encoded. Furthermore, significant positive correlations were observed between performance accuracy and the intracranial activity estimated within the left STP. The efficacy of S1 processing within the STP is thus predictive of behavioral performance outcome during auditory spatial discrimination. Our data support a model wherein refinement of spatial representations occurs within the STP and that interactions with parietal structures allow for transformations into coordinate frames that are required for higher-order computations including absolute localization of sound sources.