In a simulation of the "cocktail party" problem, subjects listened to recordings of a target voice, obscured by four background voices from adjacent locations in space. Listening conditions were either dichotic (with interaural directional cues preserved) or diotic (same input to both ears, directional cues removed). Elderly subjects were unable to use binaural directional cues as effectively as young subjects to improve intelligibility of the target voice. The results suggest that there is an age related deficit in the ability to perform the binaural signal analysis necessary to effectively separate speech signals from noise.