This paper examines the possibility of estimating basilar-membrane (BM) nonlinearity using a psychophysical technique. The level of a forward masker required to mask a brief signal was measured for conditions where the masker was either at, or one octave below, the signal frequency. The level of the forward masker at masked threshold provided an indirect measure of the BM response to the signal, as follows. Consistent with physiological studies, it was assumed that the BM responds linearly to frequencies well below the characteristic frequency (CF). Thus the ratio of the slopes of the masking functions between a masker at the signal frequency and a masker well below the signal frequency should provide an estimate of BM compression at CF. Results obtained from normally hearing listeners were in quantitative agreement with physiological estimates of BM compression. Furthermore, differences between normally hearing listeners and listeners with cochlear hearing impairment were consistent with the physiological effects of damage to the cochlea. The results support the hypothesis that BM nonlinearity governs the nonlinear growth of the upward spread of masking, and suggest that this technique provides a straightforward method for estimating BM nonlinearity in humans.