Age-related differences in identifying speech in noise were investigated by means of a computerized four-alternative forced-choice task. In experiment 1, children 5 to 11 and adults heard prerecorded instructions (e.g., ‘‘Touch the X’’) mixed with multitalker babble. Selections were made on a touch-sensitive screen and corrective feedback was provided. To control for age-related differences in sensitivity, signal-to-noise ratios yielding 85% correct were determined for each age group. The S/N difference between the youngest and oldest listeners was 5 dB, consistent with previous research. Equivalent additions of background noise had comparable effects for all age groups, which implies that previously reported age differences in noise were attributable to sensitivity differences rather than noise effects. Experiment 2 investigated the degree to which sentential context affected speech identification in similar noise. Children 5 and 9 years of age and adults identified the final word in high-context (e.g., ‘‘I carried the water in a pail’’) and low-context sentences (e.g., ‘‘He looked at the pail’’), with differences in auditory sensitivity controlled. Adults benefited ore from high sentential context than did younger children, indicating that limitations in cognitive processing adversely affect children’s perception of speech in noise. [Work supported by the Medical Research Council of Canada.]