Evoked potential measurements of two Florida manatees (Trichechusmanatuslatirostris) suggest that these herbivores have evolved an auditory system with high temporal resolution. The manatee modulation rate transfer function (MRTF) is maximally sensitive to a 600‐Hz amplitude modulation (AM) rate. This modulation rate is midway between the AM sensitivities of terrestrial mammals (chinchillas, gerbils, and humans) (80–150 Hz) and dolphins (1000–1200 Hz). We also demonstrate evoked potential responses to carrier frequencies up to 40 kHz. These results suggest that manatees may have reasonable underwater localization abilities despite the high speed of sound underwater, which could be important in enabling them to localize oncoming boats.