OBJECTIVE: The primary aim of this study was to examine whether there is an association between magnetoencephalography-based (MEG) indices of basic cortical auditory processing and vocal affect recognition (VAR) ability in individuals with autism spectrum disorder (ASD). METHOD: MEG data were collected from 25 children/adolescents with ASD and 12 control participants using a paired-tone paradigm to measure quality of auditory physiology, sensory gating, and rapid auditory processing. Group differences were examined in auditory processing and vocal affect recognition ability. The relationship between differences in auditory processing and vocal affect recognition deficits was examined in the ASD group. RESULTS: Replicating prior studies, participants with ASD showed longer M1n latencies and impaired rapid processing compared with control participants. These variables were significantly related to VAR, with the linear combination of auditory processing variables accounting for approximately 30% of the variability after controlling for age and language skills in participants with ASD. CONCLUSIONS: VAR deficits in ASD are typically interpreted as part of a core, higher order dysfunction of the social brain; however, these results suggest they also may reflect basic deficits in auditory processing that compromise the extraction of socially relevant cues from the auditory environment. As such, they also suggest that therapeutic targeting of sensory dysfunction in ASD may have additional positive implications for other functional deficits.