The effects of reverberation time (RT) upon monaural and binaural speech discrimination were investigated for normal‐hearing and hearing‐impaired subjects. After preliminary tests, the Modified Rhyme Test was administered through headphones at RTs of 0, 1, 2 and 3 sec, monaurally and binaurally. For all conditions, the normals performed significantly better than the impaired group, although a similar trend was evident for both groups. Binaural scores were significantly higher at each RT for both groups (in spite of homophasic conditions). For both groups, monaural and binaural scores decreased with increasing RT. Monaural scores decreased at a faster rate with RT than binaural (this effect was more marked for normals). Increasing the monaural presentation levels to simulate binaural loudness gain did not result in higher scores. It was concluded that speech discrimination under reverberation is superior binaurally to monaurally for both normal and hearing‐impaired persons. This is due, at least partly, to the ability of the binaural system to squelch the effects of reverberation. A theoretical model is suggested for the binaural squelch of reverberation.