The effect of fast (syllabic) compression with overshoot reduction was studied in moderately hearing-impaired and in severely hearing-impaired listeners in quiet and in noisy situations. A test battery of daily masking noises was selected using multidimensional scaling techniques. Four relevant noises were selected: a multi-talker babble, the noise in an industrial plant, in a printing office and a city-noise background. The speech measurements show that only selected patients benefit from syllabic compression, i.e. listeners with a poor speech discrimination score. The effect in noisy surroundings was tested at the critical signal-to-noise ratio of each patient, showing whether they benefited from compression in the most critical condition or not. It turns out that the effect depends largely on the speech discrimination score and the modulation of the noise signal. When the speech discrimination score is good, compression tends to impair the results. When the speech discrimination score is poor, compression helps if the noise is modulated.