The fly, Ormia ochracea, possess a novel auditory organ, which allows it to detect airborne sounds. The mechanical coupling of its pair of tympanal membranes provides the basis for a unique means of sensing the direction of a sound source. In this study, we characterized the neuroanatomy, frequency tuning, and neurophysiological response properties of the acoustic afferents. Our experiments demonstrate that the fly's nervous system is able to encode and localize the direction of a sound source, although the binaural auditory cues available in the acoustic sound field are miniscule. Almost all of the acoustic afferents recorded in this study responded to short and long sound pulses with a phasic burst of one to four action potentials. A few afferents responded tonically for the duration of the sound stimulus. A prominent class of afferents responds to suprathreshold stimuli with only a single spike discharge, independent of stimulus level, frequency, or duration. We also tested the response of the afferents to speakers separated by 180 degrees along the azimuth of the fly. We found that the afferent responses have a shorter latency because of ipsilateral stimulation. This could be a temporal code of the direction of a sound source. The threshold frequency tuning for the afferents revealed a range of sensitivities to the frequency of the cricket host's calling song frequency. The difference in the number of afferents above threshold on either side of the animal is a population code, which can also be used for sound localization.