This study examines whether speech intelligibility in background sounds can be improved for persons with loudness recruitment by the use of fast-acting compression applied at high frequencies, when the overall level of the sounds is held constant by means of a slow-acting automatic gain control (AGC) system and when appropriate frequency-response shaping is applied. Two types of fast-acting compression were used in the high-frequency channel of a two-channel system: a compression limiter with a 10:1 compression ratio and with a compression threshold about 9 dB below the peak level of the signal in the high-frequency channel; and a wide dynamic range compressor with a 2:1 compression ratio and with the compression threshold about 24 dB below the peak level of the signal in the high-frequency channel. A condition with linear processing in the high-frequency channel was also used. Speech reception thresholds (SRTs) were measured for two background sounds: a steady speech-shaped noise and a single male talker. All subjects had moderate-to-severe sensorineural hearing loss. Three different types of speech material were used: the adaptive sentence lists (ASL), the Bamford-Kowal-Bench (BKB) sentence lists and the Boothroyd word lists. For the steady background noise, the compression generally led to poorer performance than for the linear condition, although the deleterious effect was only significant for the 10:1 compression ratio. For the background of a single talker, the compression had no significant effect except for the ASL sentences, where the 10:1 compression gave significantly better performance than the linear condition. Overall, the results did not show any clear benefits of the fast-acting compression, possibly because the slow-acting AGC allowed the use of gains in the linear condition that were markedly higher than would normally be used with linear hearing aids.