Timbre is a major attribute of sound perception and a key feature for the identification of sound quality. Here, we present event-related brain potentials (ERPs) obtained from sixteen healthy individuals while they discriminated complex instrumental tones (piano, trumpet, and violin) or simple sine wave tones that lack the principal features of timbre. Data analysis yielded enhanced N1 and P2 responses to instrumental tones relative to sine wave tones. Furthermore, we applied an electrical brain imaging approach using low-resolution electromagnetic tomography (LORETA) to estimate the neural sources of N1/P2 responses. Separate significance tests of instrumental vs. sine wave tones for N1 and P2 revealed distinct regions as principally governing timbre perception. In an initial stage (N1), timbre perception recruits left and right (peri-)auditory fields with an activity maximum over the right posterior Sylvian fissure (SF) and the posterior cingulate (PCC) territory. In the subsequent stage (P2), we uncovered enhanced activity in the vicinity of the entire cingulate gyrus. The involvement of extra-auditory areas in timbre perception may imply the presence of a highly associative processing level which might be generally related to musical sensations and integrates widespread medial areas of the human cortex. In summary, our results demonstrate spatio-temporally distinct stages in timbre perception which not only involve bilateral parts of the peri-auditory cortex but also medially situated regions of the human brain associated with emotional and auditory imagery functions.