When I insert a audio file into my midi project it cancels out the midi sound. The audio play just fine and I can see the midi sound meters playing but no midi sound. Sonar x3 studio. Any help would be appreciated,,

Where are you putting the audio file?
 
You need to import your audio file to a new track (not the track that your midi track is outputting to.)

Yes I am putting the audio in a separate track. There are 10 midi tracks and the one audio track. It is a mp3 file so I'm wondering
If that may be the problem. Maybe it doesn't like the mp3 file although it plays it and cancels out the midi sound.

Each track must have its own output. The midi should go to a midi playback instrument and the audio should go to something designed to play back audio. The output of both instruments should go to your master output device.
I have a feeling this is something really simple but you have no system specs listed or any of your playback devices.

Is the MIDI driving soft synths in SONAR (preferred) or are you maybe using the onboard GM Wavetable synth for playback of the MIDI tracks? Either way should work, but I could imagine some onboard sound systems might not do both at the same time (Wavetable and audio playback). You really should be using soft synths in any case as you'll have sync problems between audio from SONAR and the typically high latency of Wavetable playback.

Yes I am using him wave table for midi. But it's not a sync problem I don't think. The midi plays fine until I import the MP3. And then I can hear the MP3 but no midi.

My guess is also that the integrated soundchip can't manage the ten MIDI instruments plus the audio.
There are so many reasons not to use the  Wavetable synth, the biggest being the shortcomings in bouncing and exporting and the quality of instrument sounds.

Thanks everyone. Still haven't resolved issue but I'm desperate to add a prerecoded vocal backup to my midi file. I wentt the back door way and just played the file thru my P.A and recorded and the part into my mp3 recorder which created the file I needed for live performance. I will work on the problem when I am not playing out so much and have more time.

Here's the quickest way to get away from using the Wavetable synth; should deliver comparable (possibly better) sound quality:
 
- Open the MIDI File
- Insert > Soft Synth > Cakewalk TTS-1
- Ctrl+A to select all tracks.
- Hold Ctrl while re-assigning the Output of one MIDI track to TTS-1 (re-assigns the output of all selected tracks by Quick Grouping).
- Import the audio.
- Play
 
Assuming the tempo of the audio is perfectly matching the project (not usually a good bet), you should hear everything, and it should be in sync. But note that MP3 files always have a few milliseconds of 'dead air' at the front due to the encoding process that will cause the audio to be a little late relative to the MIDI-driven soft synth. This can be easily corrected in SONAR by zooming in, slip-editing the start of the clip, and dragging it back to 1:01:000 (or wherever the first note should hit in the timeline).

Yes, that worked Mr. Brundefly. Thank you and everyone that helped me.