Acoustic periodicity is an important factor for discriminating consonant and dissonant intervals. While previous studies have found that the periodicity of musical intervals is temporally encoded by neural phase locking throughout the auditory system, how the nonlinearities of the auditory pathway influence the encoding of periodicity and how this effect is related to sensory consonance has been underexplored. By measuring human auditory brainstem responses (ABRs) to four diotically presented musical intervals with increasing degrees of dissonance, this study seeks to explicate how the subcortical auditory system transforms the neural representation of acoustic periodicity for consonant versus dissonant intervals. ABRs faithfully reflect neural activity in the brainstem synchronized to the stimulus while also capturing nonlinear aspects of auditory processing. Results show that for the most dissonant interval, which has a less periodic stimulus waveform than the most consonant interval, the aperiodicity of the stimulus is intensified in the subcortical response. The decreased periodicity of dissonant intervals is related to a larger number of nonlinearities (i.e., distortion products) in the response spectrum. Our findings suggest that the auditory system transforms the periodicity of dissonant intervals resulting in consonant and dissonant intervals becoming more distinct in the neural code than if they were to be processed by a linear auditory system.