Despite reports of improved auditory discrimination capabilities in blind humans and visually deprived animals, there is no general agreement as to the nature or pervasiveness of such compensatory sensory enhancements. Neuroimaging studies have pointed out differences in cerebral organization between blind and sighted humans, but the relationship between these altered cortical activation patterns and auditory sensory acuity remains unclear. Here we compare behavioural and electrophysiological indices of spatial tuning within central and peripheral auditory space in congenitally blind and normally sighted but blindfolded adults to test the hypothesis (raised by earlier studies of the effects of auditory deprivation on visual processing,) that the effects of visual deprivation might be more pronounced for processing peripheral sounds. We find that blind participants displayed localization abilities that were superior to those of sighted controls, but only when attending to sounds in peripheral auditory space. Electrophysiological recordings obtained at the same time revealed sharper tuning of early spatial attention mechanisms in the blind subjects. Differences in the scalp distribution of brain electrical activity between the two groups suggest a compensatory reorganization of brain areas in the blind that may contribute to the improved spatial resolution for peripheral sound sources.