The purpose of the present study was to examine the immediate and long-term effects of hearing loss on the speech perception of children. Hearing loss was simulated in normally-hearing children and their performance was compared to that of children with hearing loss (long-term effects) as well as to their own performance in quiet (immediate effects). Eleven children with normal hearing (7-10 years) were matched to five children with mild to moderate sensorineural hearing loss (8-10 years). Frequency-shaped broadband noise was used to elevate the hearing thresholds of the children with normal hearing to those of their matched hearing-impaired peer. Meaningful and nonsense sentences were presented at five levels and quantified using an audibility index (AI). Comparison of the AI functions calculated for each group and listening condition revealed a significant, immediate effect of elevated hearing thresholds in the children with normal hearing but no long-term effects of hearing loss. The results of this study suggest that hearing loss affects speech perception adversely and that amplification does not fully compensate for those effects. However, the data suggest that over the long term children may develop compensatory strategies to reduce the effects of hearing loss.