Listening conditions in the real world involve segregating the stimuli of interest from competing auditory stimuli that differ in their sound level and spectral content. It is in these conditions of complex spectrotemporal processing that listeners with age-related hearing loss experience the most difficulties. Envelope following responses (EFRs) provide objective neurophysiological measures of auditory processing. EFRs were obtained to two simultaneous sinusoidally amplitude modulated (sAM) tones from young and aged Fischer-344 rats. One was held at a fixed suprathreshold sound level (sAM1 FL ) while the second varied in sound level (sAM2 VL ) and carrier frequency. EFR amplitudes to sAM1 FL in the young decreased with signal-to-noise ratio (SNR), and this reduction was more pronounced when the sAM2 VL carrier frequency was spectrally separated from sAM1 FL . Aged animals showed similar trends, while having decreased overall response amplitudes compared to the young. These results were replicated using an established computational model of the auditory nerve. The trends observed in the EFRs were shown to be due to the contributions of the lowfrequency tails of high-frequency neurons, rather than neurons tuned to the sAM1 FL carrier frequency. Modeling changes in threshold and neural loss reproduced some of the changes seen with age, but accuracy improved when combined with an additional decrease representing synaptic loss of auditory nerve neurons. Sound segregation in this case derives primarily from peripheral processing, regardless of age. Contributions by more central neural mechanisms are likely to occur only at low SNRs.