Many tinnitus patients report difficulties understanding speech in noise or competing talkers, despite having “normal” hearing in terms of audiometric thresholds. The interference caused by tinnitus is more likely central in origin. Release from informational masking (more central in origin) produced by competing speech may further illuminate central interference due to tinnitus. In the present study, masked speech understanding was measured in normal hearing listeners with or without tinnitus. Speech recognition thresholds were measured for target speech in the presence of multi-talker babble or competing speech. For competing speech, speech recognition thresholds were measured for different cue conditions (i.e., with and without target-masker sex differences and/or with and without spatial cues). The present data suggest that tinnitus negatively affected masked speech recognition even in individuals with no measurable hearing loss. Tinnitus severity appeared to especially limit listeners’ ability to segregate competing speech using talker sex differences. The data suggest that increased informational masking via lexical interference may tax tinnitus patients’ central auditory processing resources.