Adaptive linear filtering algorithms are commonly used to cancel feedback in hearing aids. The use of these algorithms is based on the assumption that the feedback path is linear, so nonlinearities in the feedback path may affect performance. This study investigated the effect on feedback canceller performance of clipping of the feedback signal arriving at the microphone, as well as the benefit of applying identical clipping to the cancellation signal so that the cancellation path modeled the nonlinearity of the feedback path. Feedback signal clipping limited the amount of added stable gain that the feedback canceller could provide, and caused misadjustment in response to high-level inputs, by biasing adaptive filter coefficients toward lower magnitudes. Cancellation signal clipping mitigated these negative effects, permitting higher amounts of added stable gain and less misadjustment in response to high-level inputs, but the benefit was reduced in the presence of the highest-level inputs.