The current study investigated how unconscious physiological signals influence conscious auditory perception, focusing on whether the cardiac cycle modulates bistable auditory perception and early neural encoding. Prior work suggests that systole—marked by peak baroreceptor activity—dampens sensory processing by influencing attention and perceptual sensitivity. We tested whether systolic timing affects both perceptual interpretation and the frequency-following response (FFR), a neural marker of auditory encoding. In a within-subjects EEG design (N = 20), paired t-tests revealed significantly reduced FFR amplitude during systole compared to diastole, t(19) = –2.11, p = .024 (one-tailed), indicating attenuated auditory encoding. Behaviorally, a generalized linear mixed model (GLMM) showed that systolic tone presentation increased the likelihood of perceiving two auditory streams, β = 0.19, SE = 0.093, z = 2.03, p = .021 (one-tailed). These effects align with predictive coding and attentional gating theories, which propose that precise interoceptive signals like heartbeat timing can suppress competing external inputs and bias perceptual organization. Supporting this, greater frequency separation between tones independently predicted stream segregation, β = 1.17, SE = 0.060, z = 19.52, p < .001. Interoceptive accuracy (IAcc), assessed via a heartbeat discrimination task, averaged 55% (range: 45.9%–72.0%) but was not significantly correlated with FFR suppression (r = –.08, p = .73) or streaming during systole (r = .14, p = .57), suggesting that cardiac-linked effects were not reliably modulated by IAcc in this sample. Overall, these findings suggest that interoceptive signals shape auditory perception through dynamic modulation of both sensory encoding and attention