Periodic amplitude modulations AMs of an acoustic stimulus are presumed to be encoded in temporal activity patterns of neurons in the cochlear nucleus. Physiological recordings indicate that this temporal AM code is transformed into a rate-based periodicity code along the ascending auditory pathway. The present study suggests a neural circuit for the transformation from the temporal to the rate-based code. Due to the neural connectivity of the circuit, bandpass shaped rate modulation transfer functions are obtained that correspond to recorded functions of inferior colliculus IC neurons. In contrast to previous modeling studies, the present circuit does not employ a continuously changing temporal parameter to obtain different best modulation frequencies BMFs of the IC bandpass units. Instead, different BMFs are yielded from varying the number of input units projecting onto different bandpass units. In order to investigate the compatibility of the neural circuit with a linear modulation filterbank analysis as proposed in psychophysical studies, complex stimuli such as tones modulated by the sum of two sinusoids, narrowband noise, and iterated rippled noise were processed by the model. The model accounts for the encoding of AM depth over a large dynamic range and for modulation frequency selective processing of complex sounds.