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Many people exposed to sinewave analogues of speech first report hearing them as electronic glissando and, later, when they switch into a ‘speech mode’, hearing them as syllables. This perceptual switch modifies their discrimination abilities, enhancing perception of differences that cross phonemic boundaries while diminishing perception of differences within phonemic categories. Using high-density evoked potentials and fMRI in a discrimination paradigm, we studied the changes in brain activity that are related to this change in perception. With ERPs, we observed that phonemic coding is faster than acoustic coding: The electrophysiological mismatch response (MMR) occurred earlier for a phonemic change than for an equivalent acoustic change. The MMR topography was also more asymmetric for a phonemic change than for an acoustic change. In fMRI, activations were also significantly asymmetric, favoring …