Percepts and words can be decoded from distributed neural activity measures. However, the existence of widespread representations might conflict with the more classical notions of hierarchical processing and efficient coding, which are especially relevant in speech processing. Using fMRI and magnetoencephalography during syllable identification, we show that sensory and decisional activity colocalize to a restricted part of the posterior superior temporal gyrus (pSTG). Next, using intracortical recordings, we demonstrate that early and focal neural activity in this region distinguishes correct from incorrect decisions and can be machine-decoded to classify syllables. Crucially, significant machine decoding was possible from neuronal activity sampled across different regions of the temporal and frontal lobes, despite weak or absent sensory or decision-related responses. These findings show that speech-sound categorization relies on an efficient readout of focal pSTG neural activity, while more distributed activity patterns, although classifiable by machine learning, instead reflect collateral processes of sensory perception and decision.