Three pairs of headphones [standard iPod ear buds and two noise-canceling headphones (NCHs)] were chosen to investigate frequency characteristics of noise reduction, together with their attenuation effects on preferred listening levels (PLLs) in the presence of various types of background noise. Twenty-six subjects with normal hearing chose their PLLs in quiet, street noise, and subway noise using the three headphones and with the noise-canceling system on/off. Both sets of NCHs reduced noise levels at mid- and high-frequencies. Further noise reductions occurred in low frequencies with the noise canceling system switched on. In street noise, both NCHs had similar noise reduction effects. In subway noise, better noise reduction effects were found in the expensive NCH and with noise-canceling on. A two way repeated measures analysis of variance showed that both listening conditions and headphone styles were significant influencing factors on the PLLs. Subjects tended to increase their PLLs as the background noise level increased. Compared with ear buds, PLLs obtained from NCHs-on in the presence of background noise were reduced up to 4 dB. Therefore, proper selection and use of NCHs appears beneficial in reducing the risk of hearing damage caused by high music listening levels in the presence of background noise.