The effects of sensation level on discrimination of the relative phase of three component stimuli centered at 2 kHz was examined. The phase of the center component was varied in 180 steps between 0 and 3600. A 3I-2AFC paradigm was used with the zero phase stimuli as the standard. In order to maximize the range of performance, the stimuli were optimally chosen for each subject. The frequency separations between components were adjusted to be close to the critical bandwidth at 2 kHz, and the relative attenuation of the side bands were also varied. Maximum discrimination did not always occur for the QFM stimuli (relative phase shift of 900). The phase of optimal discrimination changed systematically as the stimulus levels increased from 20 to 70 dB SL. Interaction of distortion products generated by two adjacent components with the third component, or a level-dependent dispersion of the stimulus envelope due to changes in the traveling wave velocity near the characteristic place, could account for the results. A linear model of cochlear processing is not consistent with the data.