Listeners' perception of acoustically presented speech is constrained by many different sources of information that arise from other sensory modalities and from more abstract higher-level language context. An open question is how perceptual processes are influenced by and interact with these other sources of information. In this study, we use fMRI to examine the effect of a prior sentence fragment meaning on the categorization of two possible target words that differ in an acoustic phonetic feature of the initial consonant, VOT. Specifically, we manipulate the bias of the sentence context (biased, neutral) and the target type (ambiguous, unambiguous). Our results show that an interaction between these two factors emerged in a cluster in temporal cortex encompassing the left middle temporal gyrus and the superior temporal gyrus. The locus and pattern of these interactions support an interactive view of speech processing and suggest that both the quality of the input and the potential bias of the context together interact and modulate neural activation patterns.