The Modified Rhyme Test (MRT), recorded using natural speech and two forms of synthetic speech, DECtalk and Votrax, was used to measure both open-set and closed-set speech-recognition performance. Performance of hearing-impaired elderly listeners was compared to two groups of young normal-hearing adults, one listening in quiet, and the other listening in a background of spectrally shaped noise designed to simulate the peripheral hearing loss of the elderly. Votrax synthetic speech yielded significant decrements in speech recognition compared to either natural or DECtalk synthetic speech for all three subject groups. There were no differences in performance between natural speech and DECtalk speech for the elderly hearing-impaired listeners or the young listeners with simulated hearing loss. The normal-hearing young adults listening in quiet out-performed both of the other groups, but there were no differences in performance between the young listeners with simulated hearing loss and the elderly hearing-impaired listeners. When the closed-set identification of synthetic speech was compared to its open-set recognition, the hearing-impaired elderly gained as much from the reduction in stimulus/response uncertainty as the two younger groups. Finally, among the elderly hearing-impaired listeners, speech-recognition performance was correlated negatively with hearing sensitivity, but scores were correlated positively among the different talker conditions. Those listeners with the greatest hearing loss had the most difficulty understanding speech and those having the most trouble understanding natural speech also had the greatest difficulty with synthetic speech.