The present study aimed to find out how different stages of cortical auditory processing (sound encoding, discrimination, and orienting) are affected in children with autism. To this end, auditory event-related potentials (ERP) were studied in 15 children with autism and their controls. Their responses were recorded for pitch, duration, and vowel changes in speech stimuli, and for corresponding changes in the non-speech counterparts of the stimuli, while the children watched silent videos and ignored the stimuli. The responses to sound repetition were diminished in amplitude in the children with autism, reflecting impaired sound encoding. The mismatch negativity (MMN), an ERP indexing sound discrimination, was enhanced in the children with autism as far as pitch changes were concerned. This is consistent with earlier studies reporting auditory hypersensitivity and good pitch-processing abilities, as well as with theories proposing enhanced perception of local stimulus features in individuals with autism. The discrimination of duration changes was impaired in these children, however. Finally, involuntary orienting to sound changes, as reflected by the P3a ERP, was more impaired for speech than non-speech sounds in the children with autism, suggesting deficits particularly in social orienting. This has been proposed to be one of the earliest symptoms to emerge, with pervasive effects on later development.