The mismatch negativity (MMN) is a brain response to violations of a rule, established by a sequence of sensory stimuli (typically in the auditory domain) [Näätänen R. Attention and brain function. Hillsdale, NJ: Lawrence Erlbaum; 1992]. The MMN reflects the brain’s ability to perform automatic comparisons between consecutive stimuli and provides an electrophysiological index of sensory learning and perceptual accuracy. Although the MMN has been studied extensively, the neurophysiological mechanisms underlying the MMN are not well understood. Several hypotheses have been put forward to explain the generation of the MMN; amongst these accounts, the “adaptation hypothesis” and the “model adjustment hypothesis” have received the most attention. This paper presents a review of studies that focus on neuronal mechanisms underlying the MMN generation, discusses the two major explanatory hypotheses, and proposes predictive coding as a general framework that attempts to unify both.