Loudness as the perceptual correlate of sound intensity is formed by some neural processing along the auditory pathway from the cochlea to the cortex. The loudness of a sound is largely determined by its level. Still, there are several other acoustical factors like stimulus bandwidth, duration, modulations, as well as personal factors like, e.g., the individual hearing status, that may affect perceived loudness. Binaural loudness summation refers to the finding that a binaural sound is perceived as louder than the same sound presented monaurally at the same level. Some hearing impaired listeners show an increased binaural loudness summation for broadband stimuli. The physiological background for this effect is not yet clear. We report an auditory functional MRI study comparing results from normal hearing and hearing-impaired listeners for monaural and diotic stimuli presented at different intensities. All listeners completed a categorical loudness scaling procedure, to allow for an analysis of the auditory fMRI data with respect to both, physical sound intensity as well as individual loudness perception. The results indicate systematic differences across the different stages of the auditory pathway, when comparing level and loudness-related brain activation. The brain activation is systematically increasing with sound level at all stages from brainstem to cortex. Specific effects related to individual loudness and loudness summation can be demonstrated in primary auditory cortex and in auditory association areas in Planum temporale, while the activation in more lateral regions on the first transverse temporal gyrus (Heschl) in cortex as well as in auditory brainstem structures appears to be less specific for individual loudness judgements.