Spatial hearing skills are essential for children as they grow, learn and play. They provide critical cues for determining the locations of sources in the environment, and enable segregation of important sources, such as speech, from background maskers or interferers. Spatial hearing depends on availability of monaural cues and binaural cues. The latter result from integration of inputs arriving at the two ears from sounds that vary in location. The binaural system has exquisite mechanisms for capturing differences between the ears in both time of arrival and intensity. The major cues that are thus referred to as being vital for binaural hearing are: interaural differences in time (ITDs) and interaural differences in levels (ILDs). In children with normal hearing (NH), spatial hearing abilities are fairly well developed by age 4–5 years. In contrast, children who are deaf and hear through cochlear implants (CIs) do not have an opportunity to experience normal, binaural acoustic hearing early in life. These children may function by having to utilize auditory cues that are degraded with regard to numerous stimulus features. In recent years there has been a notable increase in the number of children receiving bilateral CIs, and evidence suggests that while having two CIs helps them function better than when listening through a single CI, they generally perform worse than their NH peers. This paper reviews some of the recent work on bilaterally implanted children. The focus is on measures of spatial hearing, including sound localization, release from masking for speech understanding in noise and binaural sensitivity using research processors. Data from behavioral and electrophysiological studies are included, with a focus on the recent work of the authors and their collaborators. The effects of auditory plasticity and deprivation on the emergence of binaural and spatial hearing are discussed along with evidence for reorganized processing from both behavioral and electrophysiological studies. The consequences of both unilateral and bilateral auditory deprivation during development suggest that the relevant set of issues is highly complex with regard to successes and the limitations experienced by children receiving bilateral cochlear implants.