The benefit attributable to spatial separation of speech and noise was measured as a function of low-pass cutoff frequency with and without bilateral hearing aids. Fourteen younger and 10 older adults with normal hearing and 12 older adults with mild-to-moderate sloping high frequency hearing loss were included to assess the effects of age and hearing loss. Subjects with hearing loss were provided commercially available bilateral hearing aids. Consonant recognition was measured at 70 dB SPL in a background of speech-shaped noise at 66 dB SPL. Speech and noise were low-pass filtered at 1.7, 3.4, and 7.1 kHz. Nonsense syllables were always at 0° and noise was at either 0° or 90°. Speech and noise spectra for all conditions were digitally recorded using a probe microphone placed in each ear canal of each subject. Spectra and levels of speech, and quiet thresholds for narrowband noises, were used to calculate the Articulation Index and provide predictions of unaided and aided (hearing-impaired only) consonant recognition, spatial benefit, and hearing aid benefit for each condition. Subjective ratings of workload (NASA Task Load Index) were obtained for all unaided and aided measures of speech recognition. Consonant recognition in noise improved for all groups with speech and noise spatially separated and with the addition of high-frequency speech information. Scores were poorer overall for the older adults with hearing loss than for the other groups. For normal-hearing subjects, observed scores and spatial benefit were better than predicted. For hearing-impaired subjects, scores did not significantly improve with hearing aids, even with higher frequencies and spatial separation, and were poorer than predicted especially for aided listening. Similar to subjects with normal hearing, spatial benefit for hearing-impaired subjects was larger than predicted. Younger and older adults with normal hearing benefited from spatial separation of speech and noise sources to a greater extent than predicted based on simple audibility. Thus, no age-related deficits in the use of interaural difference cues were observed. Although hearing aid benefit was negligible, perceived listening effort was lower aided than unaided, especially with spatial separation. Articulation Index predictions revealed that speech audibility was generally restored with hearing aids across a wide bandwidth of speech, especially in the far ear. Thus, reduced audibility was not a primary factor in limited hearing aid benefit, suggesting that peripheral, central-auditory and/or cognitive changes may have played a role. In contrast, unaided and aided spatial benefit was better than predicted, and spatial benefit was slightly larger with hearing aids than without. Thus, these older adults with hearing loss using bilateral hearing aids were able to take advantage of binaural cues to improve consonant recognition in noise.