This experiment simulated the threshold elevation and loudness recruitment associated with three different types of hearing loss: moderate flat (condition R2), severe flat (condition R3), and moderate-to-severe sloping (condition RX). This was done to allow an examination of the effects of these factors on the intelligibility of speech, in isolation from other factors that are normally associated with cochlear hearing loss, such as reduced frequency selectivity. The speech was presented at a fixed input level of 65 dB SPL, against a background of a noise whose spectrum was shaped to match the long-term average spectrum of the speech. The level of the background noise varied from 65 to 74 dB SPL. The simulation was performed by splitting the input signal into 13 frequency bands, and processing the envelope in each band so as to create loudness sensations in a normal ear that would resemble those produced in an impaired ear with recruitment. The bands were then recombined. All tests were performed using subjects with normal hearing. The simulation of hearing loss produced decrements in performance. The speech in condition R3 was inaudible. For conditions R2 and RX, the speech-to-noise ratios had to be up to 6 dB higher than in the control condition (R1, unprocessed stimuli) to achieve similar levels of performance. When linear amplification according to the NAL prescription was applied before the simulation, performance improved markedly for conditions R2 and RX, and did not differ significantly from that for R1. For condition R3, performance with simulated NAL amplification remained below that for condition R1; the decrement in performance was equivalent to about a 1 dB change in speech-to-noise ratio. The results of the present experiment show much smaller decrements in performance than those of an earlier experiment using a single talker as the interfering sound (Moore and Glasberg, 1993). It appears that loudness recruitment and threshold elevation have larger effects for a fluctuating background sound than for a steady background sound, and linear amplification is more effective in the latter case.