This paper presents a neurophysiological approach to tinnitus and discusses its clinical implications. A hypothesis of discordant damage of inner and outer hair cells systems in tinnitus generation is outlined. A recent animal model has facilitated the investigation of the mechanisms of tinnitus and has been further refined to allow for the measurement of tinnitus pitch and loudness. The analysis of the processes involved in tinnitus detection postulates the involvement of an abnormal increase of gain within the auditory system. Moreover, it provides a basis for treating patients with hyperacusis, which we are considering to be a pre-tinnitus state. Analysis of the process of tinnitus perception allows for the possibility of facilitating the process of tinnitus habituation for the purpose of its alleviation. The combining of theoretical analysis with clinical findings has resulted in the creation of a multidisciplinary Tinnitus Centre. The foundation of the Centre focuses on two goals: the clinical goal is to remove tinnitus perception from the patient's consciousness, while directing research toward finding a mechanism-based method for the suppression of tinnitus generators and processes responsible for enhancement of tinnitus-related neuronal activity.