Tinnitus is a subjective perception of phantom sound that currently cannot be objectively measured. However, there is growing evidence suggesting that the biological source of tinnitus may exist in one or more than one place in the auditory pathway. Recent studies have found that neurotransmitters or modulators, such as glutamate, Y -aminobutyric acid (GABA), serotonin, dynorphin, dopamine, neurosteroid, acetylcholine (ACh) and substance P, are involved in tinnitus generation. Animal and human studies have shown that some of these neurotransmitters and the agonists or antagonists of their receptors either affect tinnitus behaviors or demonstrate some degree of treatment effects on tinnitus. However, due to the unclear biological mechanisms oftinnitus and side effects of these drugs, the value of clinical usage of such drugs in treating tinnitus is yet to be established. Revealing the relationship between tinnitus and neurotransmitter receptor functions will help identify more effective drugs for tinnitus treatment. This article reviews the literature of neurophysiological studies on tinnitus in both animal and human subject studies at various levels of the auditory pathway.