Horizontal sound localization and syllable recognition skills were examined in a group of children with unilateral sensorineural hearing loss and a matched group of normal hearers. The results showed that the unilaterally hearing-impaired children performed more poorly than the normal counterparts in both localization and speech recognition of nonsense syllables. The unilaterally hearing-impaired children had considerable difficulty understanding in a background of noise. The clinical implications of these findings are discussed.