Background: Decoding of frequency-modulated (FM) sounds is essential for phoneme identification. This study investigates selectivity to FM direction in the human auditory system. Methodology/Principal Findings: Magnetoencephalography was recorded in 10 adults during a two-tone adaptation paradigm with a 200-ms interstimulus-interval. Stimuli were pairs of either same or different frequency modulation direction. To control that FM repetition effects cannot be accounted for by their on- and offset properties, we additionally assessed responses to pairs of unmodulated tones with either same or different frequency composition. For the FM sweeps, N1m event-related magnetic field components were found at 103 and 130 ms after onset of the first (S1) and second stimulus (S2), respectively. This was followed by a sustained component starting at about 200 ms after S2. The sustained response was significantly stronger for stimulation with the same compared to different FM direction. This effect )