Under normal conditions, human speech is remarkably robust to degradation by noise and other distortions. However, people with hearing loss, including those with cochlear implants, often experience great difficulty in understanding speech in noisy environments. Recent work with normal-hearing listeners has shown that the amplitude fluctuations inherent in noise contribute strongly to the masking of speech. In contrast, this study shows that speech perception via a cochlear implant is unaffected by the inherent temporal fluctuations of noise. This qualitative difference between acoustic and electric auditory perception does not seem to be due to differences in underlying temporal acuity but can instead be explained by the poorer spectral resolution of cochlear implants, relative to the normally functioning ear, which leads to an effective smoothing of the inherent temporal-envelope fluctuations of noise. The outcome suggests an unexpected trade-off between the detrimental effects of poorer spectral resolution and the beneficial effects of a smoother noise temporal envelope. This trade-off provides an explanation for the long-standing puzzle of why strong correlations between speech understanding and spectral resolution have remained elusive. The results also provide a potential explanation for why cochlear-implant users and hearing-impaired listeners exhibit reduced or absent masking release when large and relatively slow temporal fluctuations are introduced in noise maskers. The multitone maskers used here may provide an effective new diagnostic tool for assessing functional hearing loss and reduced spectral resolution.