Due to a highly developed echolocation system, bats can accurately process and integrate acoustic parameters of fluctuating environments to maintain optimum physiological and behavioral status. The neurophysiological mechanisms of this behavior have been extensively studied and it’s time to review the progress of this research. This review is mainly about the neural mechanism underlying in species-specific signal recognition, co-varying parameters processing, Doppler-shift compensation and multi-harmonic signals processing which is related to echolocation. It will not only help us understand the strategy of how the bat auditory system processes behavior-related acoustic signals, but also to raise some issues that remained unresolved, which need further intracellular studies in CF-FM bats as a model in the future.