Speech reception thresholds (SRTs) were obtained for different azimuths of up to three interfering sound sources in a simulated (“virtual”) spatial arrangement. For the SRT measurements a fast subjective threshold assessment method was used. The reduction in SRT relative to the reference threshold caused by spatial separation of target and interference signal is called the intelligibility level difference (ILD). For normal listeners, the maximum ILD was achieved at 105° or 255° azimuth of a single noise source when the target emanated from the front (0° azimuth). The ILD decreased rapidly if the number of interfering signals was increased and if they were located on opposite sides of the head. When using continuous speech as interference, this decrease of ILD was less pronounced. These findings indicate that the binaural system can suppress interference from only one azimuthal region at a time and can utilize temporal pauses in the interference to suppress a second interference from a different direction. For eight sensorineural impaired listeners, the maximum attainable ILD for one interfering noise source was reduced in a way not predictable from the audiogram. The ability to exploit pauses in the signal of an interfering talker was also reduced. Hence, hearing-impaired listeners are handicapped in realistic spatial interference situations both by an increased monaural SRT and a reduced binaural noise reduction ability.