Purpose: Models of speech recognition suggest that "top-down" linguistic and cognitive functions, such as use of phonotactic constraints and working memory, facilitate recognition under conditions of degradation, such as in noise. The question addressed in this study was what happens to these functions when a listener who has experienced years of hearing loss obtains a cochlear implant. Method: Thirty adults with cochlear implants and 30 age-matched controls with age-normal hearing underwent testing of verbal working memory using digit span and serial recall of words. Phonological capacities were assessed using a lexical decision task and nonword repetition. Recognition of words in sentences in speech-shaped noise was measured. Results: Implant users had only slightly poorer working memory accuracy than did controls and only on serial recall of words; however, phonological sensitivity was highly impaired. Working memory did not facilitate speech recognition in noise for either group. Phonological sensitivity predicted sentence recognition for implant users but not for listeners with normal hearing. Conclusion: Clinical speech recognition outcomes for adult implant users relate to the ability of these users to process phonological information. Results suggest that phonological capacities may serve as potential clinical targets through rehabilitative training. Such novel interventions may be particularly helpful for older adult implant users.