The goal of this study was to compare the lateral inhibition and the habituation in the human auditory cortex, two important physiological effects during auditory processing that can be reliably measured by means of magnetoencephalography when recording auditory evoked fields. Applying 40-Hz amplitude-modulated stimuli allowed us to record simultaneously the slow transient evoked and the steady-state fields and thus to characterize the lateral inhibition and the habituation effect in primary and non-primary auditory cortical structures. The main finding of the study is that the lateral inhibition effect of non-primary auditory areas as measured on the major component of the slow transient auditory evoked field (N1) is significantly stronger than the corresponding habituation effect. By contrast, this effect was not observed for the 40-Hz steady-state fields, characterizing the activation of the primary auditory cortex in humans. The results might be interpreted as (i) evidence that the inhibition mediated by lateral connections is stronger than the habituation of excitatory neurons in the non-primary auditory cortex and (ii) the processing hierarchy in the human auditory cortex is demonstrated by the different behaviour of lateral inhibition and habituation in primary and non-primary auditory cortical structures.