Children who use bilateral cochlear implants (BiCIs) show significantly poorer sound localization skills than their normal hearing (NH) peers. This difference has been attributed, in part, to the fact that cochlear implants (CIs) do not faithfully transmit interaural time differences (ITDs) and interaural level differences (ILDs), which are known to be important cues for sound localization. Interestingly, little is known about binaural sensitivity in NH children, in particular, with stimuli that constrain acoustic cues in a manner representative of CI processing. In order to better understand and evaluate binaural hearing in children with BiCIs, the authors first undertook a study on binaural sensitivity in NH children ages 8-10, and in adults. Experiments evaluated sound discrimination and lateralization using ITD and ILD cues, for stimuli with robust envelope cues, but poor representation of temporal fine structure. Stimuli were spondaic words, Gaussian-enveloped tone pulse trains (100 pulse-per-second), and transposed tones. Results showed that discrimination thresholds in children were adult-like (15-389 μs for ITDs and 0.5-6.0 dB for ILDs). However, lateralization based on the same binaural cues showed higher variability than seen in adults. Results are discussed in the context of factors that may be responsible for poor representation of binaural cues in bilaterally implanted children.