Fura-2 calcium imaging in the cricket omega neuron revealed increased intracellular free calcium ion concentration in response to simulated cricket calling songs and other sound stimuli. The time course of the increase and decrease in intracellular calcium coincided with the time course of forward masking, a time-dependent modulation of auditory sensitivity. The buffering of calcium transients with high concentrations of a kinetically fast calcium buffer eliminated the post-stimulus hyperpolarization associated with forward masking, whereas the uncaging of calcium inside the neuron produced a hyperpolarization. The results suggest that sound-stimulated intracellular calcium accumulation acts by means of a calcium-activated hyperpolarizing current to produce forward masking. These findings underscore the importance of chemical dynamics in neural computation by demonstrating a behaviorally relevant role of calcium dynamics in vivo.