The P3 event-related potential (ERP) was elicited by auditory stimuli under two conditions: (1) 250 Hz standard, 500 Hz target; and, (2) 1000 Hz standard, 2000 Hz target. A group with normal hearing (n = 10), defined as subjects with less than a 16 dB loss at each tone frequency was compared to a group with hearing impairment (n = 8), defined as subjects with a loss of 16 dB or more at each tone frequency. The hearing impaired group showed significant P3 latency prolongations compared to those with normal hearing under the 2000 Hz, but not the 500 Hz target, even though subject age was used as a covariate. Under both conditions, hearing impaired subjects showed reduced P3 amplitudes compared to those with normal hearing. These findings are discussed in relation to the sensitivity of ERP assessment procedures in older adults.