It has been reported that many elderly persons exhibit problems in identifying the location of fused auditory images in a test of the precedence effect in sound localization. The precedence effect involves the neural integration of multiple competing binaural temporal cues, and may reflect subtle age-related neural timing or integration problems. This study investigated whether elderly persons who have difficulty with this test also exhibit problems with speech understanding. The speech measures involved a comparison of performance-intensity functions for phonetically balanced (PB) words and for synthetic sentences presented with ipsilateral speech competition (SSI-ICM). The performance of the elderly subjects on the precedence effect test was significantly correlated with the SSI-max scores but not with PB-max. These findings suggest that age-related difficulties in speech understanding may reflect, at least in part, breakdowns in auditory temporal acuity or resolution.