The aim of the study was to examine whether auditory binaural interaction, defined as any difference between binaurally evoked responses and the sum of monaurally evoked responses, which is thought to index functions involved in the localization and detection of signals in background noise, is atypical in a group of children with specific language impairment (SLI). Binaural interaction components (BICs) in the brainstem were compared in 19 children with SLI (13 males, six females; age range 7y 4mo-11y 10mo; mean age 9y 7mo [SD 1y 2mo]), and 31 comparison children with typical language development (16 males, 15 females; age range 7y 1mo-11y 4mo; mean age 9y 7mo [SD 1y 5mo]). Children with SLI had a significantly smaller BIC amplitude than the comparison group. However, no clear relationship was found between BIC measures and severity of language impairment. We conclude that, for some children, SLI may be associated with reduced binaural interaction which may hinder the detection or localization of speech sounds from noisy contexts during critical periods of language acquisition. (Contains 1 table and 3 figures.)