J. Child Psychol. Psychiat. Vol. 42, No. 3, pp. 329–340, 2001 Cambridge University Press  2001 Association for Child Psychology and Psychiatry Printed in Great Britain. All rights reserved 0021–963001 $1500000 Phonological Processing, Language, and Literacy : A Comparison of Children with Mild-to-moderate Sensorineural Hearing Loss and Those with Specific Language Impairment Josie Briscoe, Dorothy V. M. Bishop, and Courtenay Frazier Norbury Oxford Study of Children’s Communication Impairments, University of Oxford, U.K. Phonological skills, language ability, and literacy scores were compared for four groups : 19 children with mild-to-moderate sensorineural hearing loss (SNH), 20 children with specific language impairment (SLI), 20 controls matched on chronological age to the SNH group (CA), and 15 controls matched on receptive vocabulary level to a subset of the SLI group (CB). In common with the SLI group, mean scores of children with mild-to-moderate hearing loss were significantly poorer on tests of phonological short-term memory, phonological discrimination, and phonological awareness than CA controls. No differences between group means were observed in SNH and CA control groups on vocabulary, digit and sentence recall, sentence comprehension, and literacy scores. However, there was considerable individual variation within the SNH group. Nearly 50 % of the SNH group showed phonological impairment associated with poorer expressive and receptive vo- cabulary and higher hearing thresholds than remaining children without phonological impairment. Nonword repetition deficits were observed in SNH subgroups with and without phonological impairment and were of a similar magnitude to those observed in children with SLI. Indeed, poorer repetition in children with SLI could only be differentiated from children with SNH on phonologically complex nonwords. Overall, findings suggested major problems in nonword repetition and phonological impairment occurred without clinically significant deficits in wider language and literacy abilities in children with mild-to-moderate sensorineural hearing loss. Implications for theories of SLI are discussed. Keywords : Hearing loss, language, phonological processing, specific language impairment. Abbreviations : BPVS : British Picture Vocabulary Scale ; CA : control group A ; CB : control group B ; SLI : specific language impairment ; SLI-O : older group of children with SLI ; SLI-Y : main SLI group of younger children ; SNH : sensorineural hearing loss. Mastering written and spoken language is one of the most challenging aspects of child development. The ability to segment and discriminate phonemes from incoming speech, as well as acquire knowledge of sound patterns of a language, is important for developing word knowledge. Children with specific language impairment (SLI) whose language has failed to progress normally, despite non- verbal intellect and hearing within the normal range, and children with specific reading disability demonstrate difficulties with discriminating and manipulating phon- emes (Bruck, 1992 ; Catts, 1993 ; Leita  o, Hogben, & Fletcher, 1997 ; Snowling, Bishop, & Stothard, 2000). There is currently considerable debate as to whether the difficulties seen in these developmental disorders are due to a low-level deficit affecting auditory discrimination, or whether they reflect impairment of a specialised language- processing system. One recent perspective proposed by Baddeley, Gather- cole, and Papagno (1998) is that humans have a special- ised memory system for the short-term retention of phonological information that plays a crucial part in the Requests for reprints to : Dr Josie Briscoe, Department of Experimental Psychology, University of Bristol, 8, Woodland Road, Bristol BS8 ITN, U.K. (E-mail : J.Briscoebris.ac.uk). learning of vocabulary and syntax. Phonological short- term memory is considered to impinge on both the acquisition of new words via retention of novel phono- logical forms, and manipulation of phonological in- formation for wider aspects of language processing such as sentence comprehension. Gathercole and Baddeley (1990) proposed that core limitations in the capacity of phonological short-term memory explain the language learning difficulties of children with SLI. Consistent with this view, children with SLI have substantial difficulties with repeating nonwards, particularly longer nonwords with greater numbers of syllables (Gathercole & Baddeley, 1993, 1996). An alternative explanation of developmental disorders of language and reading regards such problems as the consequence of low-level auditory perceptual impair- ments. Such theories have a long history (Eisenson, 1968 ; Lowe & Campbell, 1965 ; Tallal, 1976 ; Tallal & Piercy, 1973), but remain controversial. Thus, while some re- searchers have demonstrated impairments in discrimi- nating rapid auditory stimuli (Tallal, 1976 ; Tallal & Piercy, 1973) and enhanced susceptibility to backward masking of auditory stimuli (Wright, Lombardino, King, Puranik, Leonard, & Merzenich, 1997), others have either failed to replicate these findings (Bishop, Carlyon, Deeks, & Bishop, 1999), or else concluded that perceptual impairments are an epiphenomenon, not causally linked 329