The objectives of this Phase II program are to develop, design and test on manikins and hearing-impaired subjects the processor- controlled hearing aid system which was breadboarded during Phase I. It will be developed so that it can be produced and sold as an in-the-ear hearing aid during Phase III. During this program, the basic design of Phase-I will be improved and tested in the laboratory on hearing-impaired subjects to establish the advantages of the processor-controlled system for speech quality and intelligibility. Also, several processor-controlled systems will be reduced to a wearable size and fitted to hearing aid-wearing patients to establish the field operation of the hearing aids and their benefits during normal use. Specifications will then be prepared for Phase III production. The results of both laboratory and field tests will provide data useful not only for the design of the proposed hearing aid, but also for the prescription of hearing aids. As a consequence, the product itself will result both in superior hearing aid performance and in improved and simplified hearing aid fitting. These improvements will provide a better hearing aid at lower cost to the user.