The effect of head‐induced interaural time delay (ITD) and interaural level differences (ILD) on binaural speech intelligibility in noise was studied for listeners with symmetrical and asymmetrical sensorineural hearing losses. The material, recorded with a KEMAR manikin in an anechoic room, consisted of speech, presented from the front (0°), and noise, presented at azimuths of 0°, 30°, and 90°. Derived noise signals, containing either only ITD or only ILD, were generated using a computer. For both groups of subjects, speech‐reception thresholds (SRT) for sentences in noise were determined as a function of: (1) noise azimuth, (2) binaural cue, and (3) an interaural difference in overall presentation level, simulating the effect of a monaural hearing aid. Comparison of the mean results with corresponding data obtained previously from normal‐hearing listeners shows that the hearing impaired have a 2.5 dB higher SRT in noise when both speech and noise are presented from the front, and 2.6–5.1 dB less binaural gain when the noise azimuth is changed from 0° to 90°. The gain due to ILD varies among the hearing‐impaired listeners between 0 dB and normal values of 7 dB or more. It depends on the high‐frequency hearing loss at the side presented with the most favorable signal‐to‐noise (S/N) ratio. The gain due to ITD is nearly normal for the symmetrically impaired (4.2 dB, compared with 4.7 dB for the normal hearing), but only 2.5 dB in the case of asymmetrical impairment. When ITD is introduced in noise already containing ILD, the resulting gain is 2–2.5 dB for all groups. The only marked effect of the interaural difference in overall presentation level is a reduction of the gain due to ILD when the level at the ear with the better S/N ratio is decreased. This implies that an optimal monaural hearing aid (with a moderate gain) will hardly interfere with unmasking through ITD, while it may increase the gain due to ILD by preventing or diminishing threshold effects.