During the transmission of acoustic signals, the spectral and temporal properties of the original signal are degraded, and with increasing distance more and more echo patterns are imposed. It is well known that these physical alterations provide useful cues to assess the distance of a sound source. Previous studies in birds have shown that birds employ the degree of degradation of a signal to estimate the distance of another singing male (referred to as ranging). Little is known about how acoustic masking by background noise interferes with ranging, and if the number of song elements and stimulus familiarity affect the ability to discriminate between degraded and undegraded signals. In this study we trained great tits (Parus major L.) to discriminate between signal variants in two background types, a silent condition and a condition consisting of a natural dawn chorus. We manipulated great tit song types to simulate patterns of reverberation and degradation equivalent to transmission distances of between 5 and 160 m. The birds' responses were significantly affected by the differences between the signal variants and by background type. In contrast, stimulus familiarity or their element number had no significant effect on signal discrimination. Although background type was a significant main effect with respect to the response latencies, the great tits' overall performance in the noisy dawn chorus was similar to the performance in silence.