We aimed to assess whether speech recognition scores (SRS) are predictive of outcomes in patients with small vestibular schwannoma (VS) undergoing observation. Ninety-five patients with VS whose initial management was observation with serial imaging were retrospectively analysed. Patients were divided into groups according to their average hearing level and SRS at diagnosis. About 60% of patients had good initial SRS (GIS) and 40% had poor initial SRS (PIS). Mean follow-up was 44 months, during which time data were collected regarding hearing level, tumour growth and the eventual management option (continued or failed observation). Observation was discontinued by 24% (23/95) of patients. GIS-patients were more likely to maintain stable hearing than those with PIS (p<0.05). Hearing was stable in 73% (64/87) of patients. These findings indicate that patients with PIS are more vulnerable to progressive hearing loss than those with GIS. Observation may be a suitable management option for all patients with small VS, particularly those with GIS.