Documentation of hearing aid benefit in infants and young children is problematic in that changes in speech and language require longitudinal monitoring. Previous studies have suggested that typical lexical development is correlated with performance in a novel-word learning paradigm. The goal of this study was to assess performance on a novel-word learning task by normal-hearing and hearing-impaired children. Overall performance was 60% for the normal-hearing children and 41% for the children with hearing loss. Results suggest that, for both groups, a child’s ability to learn new words can be predicted from vocabulary size, stimulus level, number of exposures, and hearing status. The variables age, audibility, word recognition scores, and word form (noun or verb) were not significant predictors. Further, the sensitivity to presentation level observed in this novel-word learning task suggests that this type of paradigm may be an effective tool for studying various forms of hearing-aid signal processing algorithms.