Information processing is characterized by conditional decisions on hierarchically organized levels. In biological systems, this principle is manifest in the phenomena of contourization and categorization, which are more or less synonymous. Primary contourization—such as in the visual system—is regarded as the first step of abstraction. Its auditory equivalent is formation of spectral pitches. Hierarchical processing is characterized by the principles of immediate processing, open end, recursion, distributed knowledge, forward processing, autonomy, and viewback. In that concept, perceptual phenomena such as illusion, ambiguity, and similarity turn out to be essential and typical. With respect to perception of musical sound, those principles and phenomena readily explain pitch categorization, tone affinity, octave equivalence (chroma), root, and tonality. As a particular example, an explanation of the tritone paradox is suggested.