Children have considerable difficulties in identifying speech in noise. In the present study, we examined age-related differences in central auditory functions that are crucial for parsing co-occurring auditory events using behavioral and event-related brain potential measures. Seventeen pre-adolescent children and 17 adults were presented with complex sounds containing multiple harmonics, one of which could be 'mistuned' so that it was no longer an integer multiple of the fundamental. Both children and adults were more likely to report hearing the mistuned harmonic as a separate sound with an increase in mistuning. However, children were less sensitive in detecting mistuning across all levels as revealed by lower d' scores than adults. The perception of two concurrent auditory events was accompanied by a negative wave that peaked at about 160 ms after sound onset. In both age groups, the negative wave, referred to as the,object-related negativity' (ORN), increased in amplitude with mistuning, The ORN was larger in children than in adults despite a lower d' score. Together, the behavioral and electrophysiological results suggest that concurrent sound segregation is probably adult-like in pre-adolescent children, but that children are inefficient in processing the information following the detection of mistuning. These findings also suggest that processes involved in distinguishing concurrent auditory objects continue to mature during adolescence.