Toothed whales and dolphins possess a hypertrophied auditory system that allows for the production and hearing of ultrasonic signals. Although the fossil record provides information on the evolution of the auditory structures found in extant odontocetes, it cannot provide information on the evolutionary pressures leading to the hypertrophied auditory system. Investigating the effect of hearing loss may provide evidence for the reason for the development of high-frequency hearing in echolocating animals by demonstrating how high-frequency hearing assists in the functioning echolocation system. The discrimination abilities of a false killer whale (Pseudorca crassidens) were measured prior to and after documented high-frequency hearing loss. In 1992, the subject had good hearing and could hear at frequencies up to 100 kHz. In 2008, the subject had lost hearing at frequencies above 40 kHz. First in 1992, and then again in 2008, the subject performed an identical echolocation task, discriminating between machined hollow aluminum cylinder targets of differing wall thickness. Performances were recorded for individual target differences and compared between both experimental years. Performances on individual targets dropped between 1992 and 2008, with a maximum performance reduction of 36.1%. These data indicate that, with a loss in high-frequency hearing, there was a concomitant reduction in echolocation discrimination ability, and suggest that the development of a hypertrophied auditory system capable of hearing at ultrasonic frequencies evolved in response to pressures for fine-scale echolocation discrimination.