Excitatory and inhibitory neurons in the mammalian sensory cortex form interconnected circuits controlling cortical stimulus selectivity, but their relation to sensory acuity remains unknown. Here we show that the behavioral alteration of frequency discrimination acuity in mice due to optogenetic activation and suppression of auditory cortex (AC) neurons varies from animal to animal in both magnitude and sign. We used Fisher information based on recordings from AC neural populations to estimate the behavioral discrimination acuity under different optogenetic conditions, and showed that the changes in population tuning consistently predict the changes in behavior for each individual separately. The strong correlation between cortical and behavioral changes demonstrates that AC facilitates frequency discrimination in a manner predicted by optimal decoding from cortical neurons. This suggests that diversity in auditory behavior may be partly explained by variations in the circuit properties of AC, consistent with theoretical prediction for balanced excitatory-inhibitory networks.