Eight subjects with bilateral sensorineural hearing losses took part in a trial comparing listening unaided with listening binaurally through two types of hearing aid, aid A and aid B. Both aids incorporated slow-acting automatic gain control (AGC) operating on the whole speech signal. However, aid A also incorporated two-channel syllabic compression. The two aids were chosen to be as similar as possible in other respects, and both were worn behind the ear. Subjects were tested in a counter-balanced order, and had at least 2 weeks of everyday experience with each aid before testing took place. Performance was evaluated in three ways: by measuring speech intelligibility in quiet for sentences at three peak sound levels, 55, 70 and 85 dB SPL; by measuring the level of speech required for 50% intelligibility (called the SRT) of sentences in two levels of speech-shaped noise, 60 and 75 dB SPL; and by administering questionnaires about experience with the aids in everyday life. Both aid A and aid B improved the intelligibility of speech in quiet relative to unaided listening, particularly at the lowest sound level. However, aid A gave lower (i.e., superior) SRTs in speech-shaped noise than aid B or unaided listening. The questionnaires also indicated that aid A gave better performance in noisy situations. The results strongly suggest that two-channel syllabic compression, combined with slow-acting AGC operating on the whole speech signal, can give superior results to slow-acting AGC alone, particularly in noisy situations.