The separation of concurrent sounds is paramount to human communication in everyday settings. The primary auditory cortex and the planum temporale are thought to be essential for both the separation of physical sound sources into perceptual objects and the comparison of those representations with previously learned acoustic events. To examine the role of these areas in speech separation, we measured brain activity using event-related functional Magnetic Resonance Imaging (fMRI) while participants were asked to identify two phonetically different vowels presented simultaneously. The processing of brief speech sounds (200 ms in duration) activated the thalamus and superior temporal gyrus bilaterally, left anterior temporal lobe, and left inferior temporal gyrus. A comparison of fMRI signals between trials in which participants successfully identified both vowels as opposed to when only one of the two vowels was recognized revealed enhanced activity in left thalamus, Heschl's gyrus, superior temporal gyrus, and the planum temporale. Because participants successfully identified at least one of the two vowels on each trial, the difference in fMRI signal indexes the extra computational work needed to segregate and identify successfully the other concurrently presented vowel. The results support the view that auditory cortex in or near Heschl's gyrus as well as in the planum temporale are involved in sound segregation and reveal a link between left thalamo-cortical activation and the successful separation and identification of simultaneous speech sounds.