Analysis of the prominent anatomical and physiological features of auditory thalamus and neocortex has enabled construction of models designed to identify functionality emergent from these biological circuits. These models have recently been shown to provide powerful computational mechanisms for processing of continuous time-varying sequences such as speech; testing on speech databases has yielded positive initial results that are reported here. The model constitutes a novel hypothesis of underlying functions of auditory neocortex, and also represents a novel approach to speech processing.