This study examined the perceptual grouping of rapid tone sequences for listeners with normal hearing and listeners with unilateral and bilateral cochlear hearing loss. The sequence ABA–ABA–was used, where A and B represent sinusoidal tones bursts (10-ms rise/fall, 80-ms steady state, 20-ms interval between tones) and – represents a silent interval of 120 ms. Tone A was fixed in frequency at 250, 500, 1000, or 2000 Hz. Tone B started with a frequency well above or below that of tone A, and its frequency was swept towards that of tone A so that the frequency separation between them decreased in an exponential manner. Listeners were required to indicate when they could no longer hear the tones A and B as two separate streams, but heard only a single stream with a “gallop” rhythm. This is called the fission boundary. For the normally hearing listeners, the separation between tones A and B at the fission boundary was roughly independent of the frequency of tone A when expressed as the difference in number of ERBs (delta E) between A and B, which is consistent with a recent model of stream segregation [M. W. Beauvois and R. Meddis, J. Acoust. Soc. Am.99, 2270–2280 (1996)]. For the unilaterally hearing-impaired listeners, there was no consistent difference in the delta E magnitudes across ears, even though the auditory filters were broader in the impaired ears. This is not consistent with the theory of Beauvois and Meddis. The bilaterally hearing-impaired listeners sometimes showed delta E magnitudes within the normal range, and sometimes showed larger than normal delta E magnitudes. The results are discussed in terms of the factors that might influence perceptual stream formation in hearing-impaired listeners.