Individuals with Down syndrome (DS) have a higher incidence of hearing loss (HL) compared with their peers without developmental disabilities. Little is known about the associations between HL and functional hearing for individuals with DS. This study investigated two aspects of auditory functions, "what" (understanding the content of sound) and "where" (localizing the source of sound), in young adults with DS. Speech reception thresholds in quiet and in the presence of interferers provided insight into speech recognition, that is, the "what" aspect of auditory maturation. Insights into "where" aspect of auditory maturation were gained from evaluating speech reception thresholds in colocated versus separated conditions (quantifying spatial release from masking) as well as right versus left discrimination and sound location identification. Auditory functions in the "where" domain develop during earlier stages of cognitive development in contrast with the later developing "what" functions. We hypothesized that young adults with DS would exhibit stronger "where" than "what" auditory functioning, albeit with the potential impact of HL. Considering the importance of auditory working memory and receptive vocabulary for speech recognition, we hypothesized that better speech recognition in young adults with DS, in quiet and with speech interferers, would be associated with better auditory working memory ability and receptive vocabulary. Nineteen young adults with DS (aged 19 to 24 years) participated in the study and completed assessments on pure-tone audiometry, right versus left discrimination, sound location identification, and speech recognition in quiet and with speech interferers that were colocated or spatially separated. Results were compared with published data from children and adults without DS and HL, tested using similar protocols and stimuli. Digit Span tests assessed auditory working memory. Receptive vocabulary was examined using the Peabody Picture Vocabulary Test Fifth Edition. Seven participants (37%) had HL in at least 1 ear; 4 individuals had mild HL, and 3 had moderate HL or worse. Participants with mild or no HL had ≥75% correct at 5° separation on the discrimination task and sound localization root mean square errors (mean ± SD: 8.73° ± 2.63°) within the range of adults in the comparison group. Speech reception thresholds in young adults with DS were higher than all comparison groups. However, spatial release from masking did not differ between young adults with DS and comparison groups. Better (lower) speech reception thresholds were associated with better hearing and better auditory working memory ability. Receptive vocabulary did not predict speech recognition. In the absence of HL, young adults with DS exhibited higher accuracy during spatial hearing tasks as compared with speech recognition tasks. Thus, auditory processes associated with the "where" pathways appear to be a relative strength than those associated with "what" pathways in young adults with DS. Further, both HL and auditory working memory impairments contributed to difficulties in speech recognition in the presence of speech interferers. Future larger-sized samples are needed to replicate and extend our findings.