The presence of cochlear-based compression at low frequencies was investigated by measuring phase effects in harmonic maskers. In normal-hearing listeners, the amount of masking produced depends strongly on the phase relationships between the individual masker components. This effect is thought to be determined primarily by properties of the cochlea, including the phase dispersion and compressive input-output function of the basilar membrane. Thresholds for signals of 250 and 1000 Hz were measured in harmonic maskers with fundamental frequencies of 12.5 and 100 Hz as a function of the masker phase curvature. Results from 12 listeners with sensorineural hearing loss showed reduced masker phase effects, when compared with data from normal-hearing listeners, at both 250- and 1000-Hz signal frequencies. The effects of hearing impairment on phase-related masking differences were not well simulated in normal-hearing listeners by an additive white noise, suggesting that the effects of hearing impairment are not simply due to reduced sensation level. Maximum differences in masked threshold were correlated with auditory filter bandwidths at the respective frequencies, suggesting that both measures are affected by a common underlying mechanism, presumably related to cochlear outer hair cell function. The results also suggest that normal peripheral compression remains strong even at 250 Hz.