Previous research has shown that postnatal exposure to simple, synthetic sounds can affect the sound representation in the auditory cortex as reflected by changes in the tonotopic map or other relatively simple tuning properties, such as AM tuning. However, their functional implications for neural processing in the generation of ethologically-based perception remain unexplored. Here we examined the effects of noise-rearing and social isolation on the neural processing of communication sounds such as species-specific song, in the primary auditory cortex analog of adult zebra finches. Our electrophysiological recordings reveal that neural tuning to simple frequency-based synthetic sounds is initially established in all the laminae independent of patterned acoustic experience; however, we provide the first evidence that early exposure to patterned sound statistics, such as those found in native sounds, is required for the subsequent emergence of neural selectivity for complex vocalizations and for shaping neural spiking precision in superficial and deep cortical laminae, and for creating efficient neural representations of song and a less redundant ensemble code in all the laminae. Our study also provides the first causal evidence for ‘sparse coding’, such that when the statistics of the stimuli were changed during rearing, as in noise-rearing, that the sparse or optimal representation for species-specific vocalizations disappeared. Taken together, these results imply that a layer-specific differential development of the auditory cortex requires patterned acoustic input, and a specialized and robust sensory representation of complex communication sounds in the auditory cortex requires a rich acoustic and social environment.