Cochlear traveling waves show properties of capillary waves, e.g., those progressing along interfaces between two nonmixing fluids. Such wave motion is basically nonlinear for a number of reasons, especially due to the boundary‐layer effects associated with surface waves. Mechanical cochlear models display two types of nonlinearities that may explain a number of auditory and/or electrophysiological phenomena: (1) an amplitude‐independent asymmetrical displacement that for appropriate signals leads to demodulation; and (2) an amplitude‐dependent event, Békésy's eddies, that leads to harmonic distortion. The asymmetry is best observed with beat signals or tone pips. It manifests itself in the perilymphatic fluid motion, the displacement of the partition, and in the shearing motion within the cochlear duct. Of the partition, larger amplitudes are invariably directed away for the input, i.e., toward scala tympani. The demodulation (or envelope detection) is due to the low‐pass filtering occurring with distance along the partition. By definition, Békésy's eddies are rectified events. They occur at higher signal levels and distort the ac fluid motion in response to the applied signal in such a way that higher harmonics appear in the traveling‐wave pattern. Such harmonics form small localized displacement maxima, each at its appropriate place.