Listeners with sensorineural hearing impairment typically exhibit auditory processing deficits such as reduced frequency and/or temporal resolution. Such deficits may represent separate sequela of auditory pathology or may result directly from the sensitivity loss and the requirement to listen at high levels. To assess the impact of increased thresholds on frequency resolution, auditory filter characteristics were determined for hearing-impaired and normal-hearing listeners at 500 and 2000 Hz in the presence of continuous broadband noise meant as a rough simulation of hearing loss. In the fitting procedure, the low-frequency skirt of the derived auditory filter was allowed to vary as a function of signal level, permitting different filter shapes to be estimated at high versus low signal levels. Listeners with moderate hearing losses at 2000 Hz demonstrated near-normal auditory filter shapes for lower signal levels, but increasingly broad and asymmetric filters as signal level was raised. At 500 Hz, where hearing losses were mild, filter bandwidths increased little at the higher signal levels. The presence of broadband noise had essentially no effect on filter shapes of either listener group. The filter shape abnormalities demonstrated by listeners with moderate hearing loss, which were not observed in normal-hearing listeners at the same signal levels, indicate that poor frequency resolution in these patients for high-intensity stimuli does not follow directly from decreased sensitivity, but instead reflects an independent pathology.