Children as young as 5 yr old localize sounds as accurately as adults in quiet in the frontal hemifield. However, children's ability to localize in noise and in the front/back (F/B) dimension are scantily studied. To address this, the first part of this study investigated localization-in-noise ability of children vs young adults in two maskers: broadband noise (BBN) and speech-babble (SB) at three signal-to-noise ratios: -12, -6, and 0 dB. In the second part, relationship between binaural medial olivocochlear system (MOC) function and localization-in-noise was investigated. In both studies, 21 children and 21 young adults participated. Results indicate, while children are able to differentiate sounds arriving in the F/B dimension on par with adults in quiet and in BBN, larger differences were found for SB. Accuracy of children's localization in noise (for both maskers) in the lateral plane was also poorer than adults'. Significant differences in binaural MOC interaction (mBIC; the difference between the sum of two monaural- and binaural-MOC strength) between adults and children were also found. For reasons which are not clear, adult F/B localization in BBN correlates better with mBIC while children's F/B localization in SB correlated better with binaural MOC strength.