Many sounds in the environment have temporal envelope fluctuations that are correlated in different frequency regions. Comodulation masking release (CMR) illustrates how such coherent fluctuations can improve signal detection. This study assesses how perceptual grouping mechanisms affect CMR. Detection thresholds for a 1-kHz sinusoidal signal were measured in the presence of a narrowband (20-Hz-wide) on-frequency masker with or without four comodulated or independent flanking bands that were spaced apart by either 1/6 (narrow spacing) or 1 octave (wide spacing). As expected, CMR was observed for the narrow and wide comodulated flankers. However, in the wide (but not narrow) condition, this CMR was eliminated by adding a series of gated flanking bands after the signal. Control experiments showed that this effect was not due to long-term adaptation or general distraction. The results. are interpreted in terms of the sequence of "postcursor" flanking bands forming a perceptual stream with the original flanking bands, resulting in perceptual segregation of the flanking bands from the masker. The results are consistent with the idea that modulation analysis occurs within, not across, auditory objects, and that across-frequency CMR only occurs if the on-frequency and flanking bands fall within the same auditory object or stream.