Purpose This study aimed to gain more insight into the primary auditory abilities of children with significant residual hearing in order to improve decision making when choosing between bimodal fitting or sequential bilateral cochlear implantation. Method Sound localization abilities, spatial release of masking, and fundamental frequency perception were tested. Nine children with bimodal fitting and seven children with sequential bilateral cochlear implants were included in the study. As a reference, 15 children with normal hearing and two children with simultaneous bilateral cochlear implants were included. Results On all outcome measures, the implanted children performed worse than the normal hearing children. For high-frequency localization, children with sequential bilateral cochlear implants performed significantly better than children with bimodal fitting. Compared to children with normal hearing, the left-right asymmetry in spatial release of masking was significant. When the implant was hindered by noise, bimodally fitted children obtained significantly lower spatial release of masking compared to when the hearing aid was hindered by noise. Overall, the larger the left-right asymmetry in spatial release of masking, the poorer the localization skills. No significant differences were found in fundamental frequency perception between the implant groups. Conclusions The data hint to an advantage of bilateral implantation over bimodal fitting. The extent of asymmetry in spatial release of masking is a promising tool for decision making when choosing whether to continue with the hearing aid or to provide a second cochlear implant in children with significant residual hearing.