Coincidence detection of bilateral acoustic signals in nucleus laminaris (NL) is the first step in azimuthal sound source localization in birds. Here, we demonstrate graded expression of hyperpolarization-activated cyclic nucleotide-gated (HCN) cation channels along the tonotopic axis of NL and its role in the regulation of coincidence detection. Expression of HCN1 and HCN2, but not HCN3 or HCN4, was detected in NL. Based on measurement of both subtype mRNA and protein, HCN1 varied along the tonotopic axis and was minimal in high-characteristic frequency (CF) neurons. In contrast, HCN2 was evenly distributed. The resting conductance was larger and the steady-state activation curve of I_h was more positive in neurons of middle to low CF than those of high CF, consistent with the predominance of HCN1 channels in these neurons. Application of 8-Br-cAMP or noradrenaline generated a depolarizing shift of the I_h voltage activation curve. This shift was larger in neurons of high CF than in those of middle CF. The shift in the activation voltage of I_h depolarized the resting membrane, accelerated the EPSP time course, and significantly improved the coincidence detection in neurons of high CF, suggesting that I_h may improve the localization of sound sources.