Functional MRI was performed to investigate differences in the basic functional organization of the primary and secondary auditory cortex regarding preferred stimulus lateralization and frequency. A modified sparse acquisition scheme was used to spatially map the characteristics of the auditory cortex at the level of individual voxels. In the regions of Heschl's gyrus and sulcus that correspond with the primary auditory cortex, activation was systematically strongest in response to contralateral stimulation. Contrarily, in the surrounding secondary active regions including the planum polare and the planum temporale, large-scale preferences with respect to stimulus lateralization were absent. Regarding optimal stimulus frequency, low- to high-frequency spatial gradients were discernable along the Heschl's gyrus and sulcus in anterolateral to posteromedial direction, especially in the right hemisphere, consistent with the presence of a tonotopic organization in these primary areas. However, in the surrounding activated secondary areas frequency preferences were erratic. Lateralization preferences did not depend on stimulus frequency, and frequency preferences did not depend on stimulus lateralization. While the primary auditory cortex is topographically organized with respect to physical stimulus properties (i.e., lateralization and frequency), such organizational principles are no longer obvious in secondary and higher areas. This suggests a neural re-encoding of sound signals in the transition from primary to secondary areas, possibly in relation to auditory scene analysis and the processing of auditory objects.