Twenty-one hearing-impaired subjects participated in the present study designed to investigate two questions. First. whether the ability to discriminate isolated words is related to sentence-based speech-reading. Second, whether older adults (i.e. 52 to 75 years) could, as in listening tasks, benefit relatively more than younger adults (i.e. 31 to 50 years) when extra contextual information is offered in the speech-reading task. The results demonstrated that word discrimination contributes significantly to efficient speech-reading performance. However, the nature of the relationship is dependent on the particular aspect of word discrimination being tested: that is, one aspect of the word-discrimination test (involving a short-term memory component) was tied to one specific speech-reading condition only (i.e. 3-word sentences), whereas another aspect (without a short-term memory component) facilitated performance in all kinds of speech-reading conditions. For both age groups it was found that contextual information had an equally facilitativc effect. The results were discussed with respect to the role played by contextual information in visual speech perception compared to other related areas (e.g. listening and reading tasks).