This study investigated the effects of simulated cochlear-implant processing on speech reception in a variety of complex masking situations. Speech recognition was measured as a function, of target-to-masker ratio, processing condition (4, 8, 24 channels, and unprocessed) and masker type (speech-shaped noise, amplitude-modulated speech-shaped noise, single male talker, and single female talker). The results showed that simulated implant processing was more detrimental to speech reception in fluctuating interference than in steady-state noise. Performance in the 24-channel processing condition was substantially poorer than in the unprocessed condition, despite the comparable representation of the spectral envelope. The detrimental effects of simulated implant processing in fluctuating maskers, even with large numbers of channels, may be due to the reduction in the pitch cues used in sound source segregation, which are normally carried by the peripherally resolved low-frequency harmonics and the temporal fine structure. The results suggest that using steady-state noise to test speech intelligibility may underestimate the difficulties experienced by cochlear-implant users in fluctuating acoustic backgrounds.