Speech recognition assessment of children with hearing loss is typically performed in quiet or with an unmodulated masker. Children with hearing loss have high levels of performance on these tasks with hearing aids, even when subjective measures indicate listening difficulties in their everyday listening situations. In the Finding Appropriate Solutions to Treat Reduced Audibility in Kids (FASTRAK) study, we developed speech recognition tasks designed to reflect challenges that children experience in real-world listening environments. Speech recognition thresholds were measured for a group of children with normal hearing and children with mild, bilateral hearing loss using a two-talker masker in three conditions: 1) colocated target and masker without reverberation, 2) colocated target and masker with reverberation, and 3) spatially separated target and masker. Thresholds in these conditions were compared to those found with a conventional speech-shaped noise masker co-located with the target talker. Receptive vocabulary, working memory, and selective attention were measured for each child. Children with better vocabulary and selective attention skills had lower thresholds in the two-talker masker compared to children with poorer attention and language. There was no relationship between working memory and speech recognition thresholds in speech-shaped noise. These results suggest that cognitive effects on masked speech recognition for children with hearing loss depend on masker type and configuration.