Navigating “cocktail party” situations by enhancing foreground sounds over irrelevant background information is typically considered from a cortico-centric perspective. However, subcortical circuits, such as the medial olivocochlear reflex (MOCR) that modulates inner ear activity itself, have ample opportunity to extract salient features from the auditory scene prior to any cortical processing. To understand the contribution of auditory subcortical nuclei and the cochleae, physiological recordings were made along the auditory pathway while listeners differentiated non(sense)-words and words. Both naturally-spoken and intrinsically-noisy, vocoded speech — filtering that mimics processing by a cochlear implant—significantly activated the MOCR, whereas listening to speechin-background noise revealed instead engagement of midbrain and cortical resources. An auditory periphery model reproduced these speech degradation-specific effects, providing a rationale for goal-directed MOCR gating to enhance representation of speech features in the auditory nerve. These results highlight two strategies co-existing in the auditory system to accommodate categorically different speech degradations.