This paper reports language ability and everyday functioning of 133 children with hearing impairment who were evaluated at 3 years of age, as part of the Longitudinal Outcomes of Children with Hearing Impairment (LOCHI) study. The language abilities of children were evaluated using the Preschool Language Scale (PLS-4), Peabody Picture Vocabulary Test (PPVT), Diagnostic Evaluation of Articulation and Phonology (DEAP) and Child Development Inventory (CDI). Everyday functioning of children was evaluated by interviewing parents using the Parents' Evaluation of Aural/oral performance of Children (PEACH) questionnaire. There were significant correlations among language measures, and also between the standardized language measures and the PEACH. On average, children who had language deficits exhibited difficulties in everyday functioning. The evidence lends support to a systematic use of parents' observations to evaluate communicative functioning of children in real life. On average, children's language attainment decreased as hearing loss increased, more so for children of less highly educated parents. Factors that were not significantly associated with speech and language outcomes at 3 years were age of amplification and socioeconomic status. As multiple factors affect children's outcomes, it will be possible to examine their effects on outcomes of children when all data in the LOCHI study are available.