Binaural-beat perception originates in the inferior colliculus of the midbrain and the superior olivary complex of the brainstem, where auditory signals from each ear are integrated and precipitate electrical impulses along neural pathways through the reticular formation up the midbrain to the thalamus, auditory cortex, and other cortical regions.[6]
When signals of two different frequencies are presented, one to each ear, the brain detects phase differences between these signals. "Under natural circumstances a detected phase difference would provide directional information. The brain processes this anomalous information differently when these phase differences are heard with stereo headphones or speakers. A perceptual integration of the two signals takes place, producing the sensation of a third "beat" frequency. The difference between the signals waxes and wanes as the two different input frequencies mesh in and out of phase. As a result of these constantly increasing and decreasing differences, an amplitude-modulated standing wave -the binaural beat- is heard. The binaural beat is perceived as a fluctuating rhythm at the frequency of the difference between the two auditory inputs. Evidence suggests that the binaural beats are generated in the brainstem's superior olivary nucleus, the first site of contra-lateral integration in the auditory system (Oster, 1973). Studies also suggest that the frequency-following response originates from the inferior colliculus (Smith, Marsh, & Brown, 1975)" (Owens & Atwater, 1995). This activity is conducted to the cortex where it can be recorded by scalp electrodes.  
Resonant entrainment of oscillating systems is a well-understood principle within the physical sciences. If a tuning fork designed to produce a frequency of 440 Hz is struck (causing it to oscillate) and then brought into the vicinity of another 440 Hz tuning fork, the second tuning fork will begin to oscillate. The first tuning fork is said to have entrained the second or caused it to resonate. The physics of entrainment apply to bio-systems as well. Of interest here are the electromagnetic brain waves. The electrochemical activity of the brain results in the production of electromagnetic wave forms which can be objectively measured with sensitive equipment. Brain waves change frequencies based on neural activity within the brain. Because neural activity is electrochemical, brain function can be modified through the introduction of specific chemicals (drugs), by altering the brain's electromagnetic environment through induction, or through resonant entrainment techniques.

A 2008 study at Hofstra University played two different binaural beats and a control sound (a babbling brook) to patients with high blood pressure. There was no difference between the groups. In one small study from Japan that was published in the Journal of Neurophysiology in 2006, they played various binaural beats to nine subjects, and observed the resulting EEGs. They found great variability in the results. Their conclusion was that listening to binaural beats can produce activity on the human cerebral cortex, however the cause was more likely a conscious auditory reaction and was not correlated to the frequency of the binaural beat. However, a 2005 study published in Clinical Neurophysiology found that they were able to induce a desired frequency in the EEG matching the phantom beat frequency encoded in a binaural beat, however this was with a single subject and was neither blinded nor controlled.
A word to the purist here. This binaural beat generator offers ten carrier frequencies, but humans only have two ears! Therefore, carriers on this generator will produce amplitude-modulated beating patterns inside each ear canal. This is not necessarily a bad thing, as it increases the perception of the overall beating pattern, and helps our brain catch up with the binaural beat. This explains why this generator produces stronger beats than any other available. If you are looking for a pure binaural beat generator instead - one without any intra-aural interference but a weaker stimulus - try our Harmonic Binaural Beat Generator; its carriers have been set to distant frequencies, in order to suppress any amplitude modulation between carriers.

Binaural meditation music is VERY popular these days, and you might have noticed that some of the companies that sell binaural music products make rather spectacular claims about the benefits of brainwave entrainment technology. Some declare that they can make you “meditate like a zen monk at the touch of a button”, or that you will “instantly meditate like the greatest gurus”. While it is true that binaural meditation music is extremely powerful, and that it can genuinely improve the quality of your life, it is not a miracle solution or a spiritual “get rich quick” scheme. Like all things in life, positive and lasting results will still take just a little time and effort on your part. Binaural meditation music just accelerates and deepens to process.
Transparent Corp's Research Area is arguably the most comprehensive resource for collated brainwave entrainment research.   Update: the main research area on Transparent Corp's website is currently being updated, so it is offline.  However, you can still access their peer-reviewed research paper as a PDF here: “A Comprehensive Review of the Psychological Effects of Brainwave Entrainment“.
The objectives and inclusion criteria of the review were clear. Relevant sources were searched for studies, although the restriction to published studies in English meant that the review was prone to publication and language biases. The authors did not state whether steps were taken to minimise the risk of bias and error in the processes of study selection and data extraction (for example, by having more than one reviewer independently make decisions). The authors mentioned which studies were blinded, but it did not appear that study validity was systematically assessed, which made it difficult to judge the reliability of the review findings. The decision to combine studies by narrative synthesis appeared appropriate given the strong clinical heterogeneity between the studies, but the authors failed to quantify the size or statistical significance of the findings reported. The evidence presented appeared to justify the authors’ conclusions that further research was justified, but in view of the dearth of good-quality evidence and problems with methodology and reporting in the review, the conclusions regarding efficacy did not appear reliable.

Brainwaves, or neural oscillations, share the fundamental constituents with acoustic and optical waves, including frequency, amplitude and periodicity. Consequently, Huygens' discovery precipitated inquiry[citation needed] into whether or not the synchronous electrical activity of cortical neural ensembles might not only alter in response to external acoustic or optical stimuli but also entrain or synchronize their frequency to that of a specific stimulus.[16][17][18][19]
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