We examined whether the amplitude decrement traditionally found for the N1 peak of the event-related potential (ERP) with repetition of auditory stimuli results from the process of habituation or from the refractory period of the neural elements underlying the N1 response. These competing accounts of the process underlying the N1 decrement with repetition differ in terms of the predicted effects of variations in stimulus repetition and interstimulus interval (ISI). These predictions were examined using a short-term habituation design with a factorial combination of stimulus repetition and ISI. Forty-five subjects received 21 stimulus trains, each consisting of seven innocuous tones, all at 1 kHz except the sixth, which was a 1.5-kHz tone. Each subject was assigned to one of three ISI conditions (either 1, 3 or 10 s). The results provide little support for the view that N1 response decrement with stimulus repetition reflects a process of habituation. The present results provide greater support for the view that this decrement is based on the separate refractory periods or recovery cycle processes of at least two neural generators contributing to activity in the N1 peak latency range. (C) 1998 Elsevier Science B.V. All rights reserved.