Because the environment often includes multiple sounds that overlap in time, listeners must segregate a sound of interest (the auditory figure) from other co-occurring sounds (the unattended auditory ground). We conducted a series of experiments to clarify the principles governing the extraction of auditory figures. We distinguish between auditory "objects" (relatively punctate events, such as a dog's bark) and auditory "streams" (sounds involving a pattern over time, such as a galloping rhythm). In Experiments 1 and 2, on each trial 2 sounds--an object (a vowel) and a stream (a series of tones)--were presented with 1 target feature that could be perceptually grouped with either source. In each block of these experiments, listeners were required to attend to 1 of the 2 sounds, and report its perceived category. Across several experimental manipulations, listeners were more likely to allocate the feature to an impoverished object if the result of the grouping was a good, identifiable object. Perception of objects was quite sensitive to feature variation (noise masking), whereas perception of streams was more robust to feature variation. In Experiment 3, the number of sound sources competing for the feature was increased to 3. This produced a shift toward relying more on spatial cues than on the potential contribution of the feature to an object's perceptual quality. The results support a distinction between auditory objects and streams, and provide new information about the way that the auditory world is parsed. (Contains 3 footnotes and 8 figures.)