Adaptation is computational strategy that underlies sensory nervous systems’ ability to accurately encode stimuli in various and dynamic contexts and shapes how animals perceive their environment. Many questions remain concerning how adaptation adjusts to particular stimulus features and its underlying mechanisms. In Chapter 2, we tested how neurons in the primary auditory cortex adapt to changes in stimulus temporal correlation. We used chronically implanted tetrodes to record neuronal spiking in rat primary auditory cortex during exposure to custom made dynamic random chord stimuli exhibiting different levels of temporal correlation. We estimated linear non-linear model for each neuron at each temporal correlation level, finding that neurons compensate for temporal correlation changes through gain-control adaptation. This experiment extends our understanding of how complex stimulus statistics are encoded in the auditory nervous system. In Chapter 3 and 4, we tested how interneurons are involved in adaptation by optogenetically suppressing parvalbumin-positive (PV) and somatostatin-positive (SOM) interneurons during tone train stimuli and using silicon probes to record neuronal spiking in mouse primary auditory cortex. In Chapter 3, we found that inhibition from both PVs and SOMs contributes to stimulus-specific adaptation (SSA) through different mechanisms. SOM inhibition was stimulus-specific, suppressing responses to standard tones more strongly than responses to deviant tones, and increasing with standard tone repetition. PVs amplified SSA because inhibition was similar for standard and deviant tones and PV mediated inhibition was insensitive to tone repetition. PVs and SOMs themselves exhibit SSA, and a Wilson-Cowan dynamic model identified that PVs and SOMs can directly contribute to SSA in pyramidal neurons. In Chapter 4, we tested how SOMs and PVs inhibition is modulated with the dynamics of adaptation and across frequency tuning, during exposure to single frequency tone trains across the neuron’s tuning curve. We found that the magnitude of SOM inhibition correlated with the magnitude of adaptive suppression, while PVs inhibition was largely insensitive to stimulus conditions. Together Chapters 3 and 4 implicate SOM inhibition in actively suppressing responses in a stimulus-specific manner while PV inhibition may passively enhance stimulus-specific suppression. These experiments inform the underlying principles and mechanisms of cortical sensory adaptation.