Down syndrome (DS) individuals are prone to auditory processing difficulties in a variety of audiological, short-term memory, and language tasks. The present study explored: (a) the hearing capabilities of DS adolescents and young adults relative to a sample of non-DS mentally handicapped (MH) individuals, and (b) the relationship between hearing ability and performance on several cognitive tasks. Samples of 26 DS and 26 MH trainable mentally handicapped individuals were matched on IQ and chronological age (CA). Audiometric data revealed greater hearing losses in DS than in MH individuals at five of the six tested frequencies, more DS conductive and mixed hearing losses, and particularly high DS losses in the high-frequency range. Measurement of the speech reception threshold revealed poorer reception of speech by the DS than the MH group. Classification of tympanograms indicated fewer normal ears and twice as many DS ears with middle ear problems reflecting no mobility or retraction of the tympanic membrane. Presence of DS middle ear difficulties was also confirmed by poorer elicitation of the acoustic (stapedius) reflex in DS subjects. Correlation of hearing variables with seven cognitive tasks administered on the same day revealed only one significant relationship after the statistical removal of the effects of CA and IQ: DS subjects with poorer hearing identified fewer words in a task in which a masking noise quickly followed a spoken word. This result suggests that group findings of DS auditory-verbal processing difficulties stem, in part, from subjects with hearing difficulties needing more time to identify spoken words.