With respect to acoustical properties, in-the-ear (ITE) aids should give better understanding and directional hearing than behind-the-ear (BTE) aids. Also hearing-impaired subjects often prefer ITEs. A study was performed to assess objectively the improvement in speech understanding and directional hearing afforded by ITE aids versus BTEs. In 28 hearing-impaired subjects, who visited our Centre for a check-up of their ITEs, the following parameters were measured: (a) thresholds for third-octave bandpass noises between 0.25 and 4 kHz, (b) speech reception thresholds for short Dutch sentences in quiet and with background noise, (c) directional hearing. All three experiments were done binaurally with the subjects wearing their ITEs, BTEs, and no hearing aid. With the 2-cc coupler, the gain used by the subject was measured. The SRT values for the ITE were significantly lower than those for BTE. More gain at 2 and 4 kHz in the ITE proved to be a responsible factor for this improvement. Directional hearing was not improved by wearing an ITE. Large interindividual differences were found between functional gain and the 2-cc coupler measurements. The mean functional gain at 4 kHz for an ITE is higher than the gain measured in a 2-cc coupler. For a BTE, the functional gain at 2 and 4 kHz is lower than the 2-cc coupler gain.