Experiment 1 replicated the finding that normal-hearing listeners identify speech better in modulated than in unmodulated noise. This modulated-unmodulated difference ("MUD") has been previously shown to be reduced or absent for cochlear-implant listeners and for normal-hearing listeners presented with noise-vocoded speech. Experiments 2-3 presented normal-hearing listeners with noise-vocoded speech in unmodulated or 16-Hz-square-wave modulated noise, and investigated whether the introduction of simple binaural differences between target and masker could restore the masking release. Stimuli were presented over headphones. When the target and masker were presented to one ear, adding a copy of the masker to the other ear ("diotic configuration") aided performance but did so to a similar degree for modulated and unmodulated maskers, thereby failing to improve the modulation masking release. Presenting an uncorrelated noise to the opposite ear ("dichotic configuration") had no effect, either for modulated or unmodulated maskers, consistent with the improved performance in the diotic configuration being due to interaural decorrelation processing. For noise-vocoded speech, the provision of simple spatial differences did not allow listeners to take greater advantage of the dips present in a modulated masker.